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Namibia

NCF & Tandii Solar Projects

$20 million
Power
Environmental and Social Review Summary
Proposed

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 enterprises (NCF Energy Pty Ltd (“NCF”) and Tandii Investment Pty Ltd. (“Tandii”)), which are constructing adjacent photovoltaic (PV) solar projects in Okatope, Oshikoto region of Namibia (hereafter referred to as the “Projects”). Investec and Mettle Solar are joint sponsors (hereafter the Sponsors) in NCF and Tandii and both Projects will have the same Engineering Procurement and Construction (EPC) and Operations and Maintenance (O&M) contractors.  

The Projects were 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.

Each Project entails the construction, operation and maintenance of a 5 MW PV solar energy facility. The electricity output of the Projects will be sold to Namibia Power Corporation Limited (“NamPower”) under 25-years Power Purchase Agreements (“PPA”). The Projects are located on approximately 30 ha of land (approximately 13.5 ha per 5 MW project and an additional 2.5 ha acquired for construction facilities) near the NamPower Okatope substation in Engoyi village, Okatope. The Projects will be connected to the substation via two short (one 615 m and the other 410 m) overhead 22 kV transmission lines, which will be constructed as part of the Projects, and then handed over to NamPower for operations and maintenance.

Both sites were selected in consultation with the headman of Engoyi village and the Okatope Traditional Authority. The sites are immediately adjacent to existing access roads, and only minor grading and compacting was required to prepare the land for the Projects. Six homesteads were resettled for the development of these Projects. Immediately prior to the Projects acquiring the land, it was primarily an unused part of a Mahangu (pearl millet) agricultural field and a soccer field.  It is anticipated that a third solar PV plant will be constructed near the Projects in the future; however, this project will be developed by a different sponsor and is still at concept stage.

Both Projects are currently in the construction phase, and the EPC contractor for both is a joint venture consortium between Jabil Inc and Auto Evolve Concepts (AEC) Development (Pty) Ltd. Construction is expected to be completed by the end of June 2019. The EPC contractor is assisted by specialist sub-contractors for the installation of the solar panels and other installation works. In addition, Rina Consulting Ltd. (“Rina”) has been engaged as the Owner’s Engineer (OE) to supervise the construction process. Rina has also been engaged as the Lender’s Technical Advisor, which includes review of environmental and social aspects. An Operations and Maintenance (O&M) contractor will be engaged for the operations phase.

Both projects are 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 land acquisition and resettlement (6 homesteads) and other risks and impacts typical of construction activities (e.g. vegetation removal; dust and noise emissions; solid waste generation; occupational health and safety; community health and safety). During operations, risks and impacts include occupational and community health and safety, water consumption, dust generation and hazardous waste management.

While all Performance Standards (PS) are applicable to both Projects, our current information indicates that both Projects 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
  • PS5:  Land Acquisition and Involuntary Resettlement

The Projects are located in a mixed tree and shrub savannah habitat, which has been modified by agriculture and grazing. One large tree (an African Wattle tree) and several smaller trees, all of which are common species that that will need to be removed for the Projects, were identified during the impact assessment. While some of the smaller trees are locally protected species, they are also widely dispersed in the region. No species of conservation significance were identified within the area of the Projects. As the potential impact of the Projects on biodiversity and living natural resources is low, PS 6: Biodiversity Conservation and Sustainable Management of Living Natural Resources is not triggered.

There are no indigenous Peoples in the Projects’ area, therefore PS 7: Indigenous Peoples is not triggered.

World Bank Group’s General Environmental, Health and Safety Guidelines as well as the sector specific guideline for Electric Power Transmission and Distribution apply to both Projects.

MIGA reviewed the following documentation:

 

  • Resettlement Action Plan: NCF 5 MW Solar Energy Plant and Tandii 5 MW Solar Energy Plan – Engoyi Village – Namibia. BSC Consulting. May 2019
  • Lender’s Technical Due Diligence Report: 2 x 5 MW PV Plants – NCF and Tandii – Namibia. Rina Consulting Ltd. December 2018
  • Environmental and Social Due Diligence: 2 x 5 MW PV Plants – NCF / Tandii – Namibia. Rina Consulting Ltd. December 2018
  • Construction Environmental Management Plan: NCF PV Plant. AEC / Jabil Consortium. October 2017
  • Brief Report – Affected Homesteads. NCF & Tandi Solar Projects, Engoyi Village, Oshikoto Region. Business Success Consulting. Undated.
  • Environmental Impact Assessment Report for the Proposed 5 MW Solar Photovoltaic Power Plant with 66 kV Powerline and Access Road next to the NamPower Substation at Okatope, in Engoyi Village, in the Oshikoto Region, Namibia. NCF Energy Pty Ltd. Health Earth Environmental Consultants. March 2016.
  • Environmental Impact Assessment Report for the Proposed 5 MW Solar Photovoltaic Power Plant with 66 kV Powerline and Access Road next to the NamPower Substation at Okatope, in Engoyi Village, in the Oshikoto Region, Namibia. Tandii Investments Pty Ltd. Health Earth Environmental Consultants. March 2016.

 

A site visit was conducted on May 2, 2019. The visit included a tour of the site and meetings with the Project sponsor, EPC contractor, OE and affected homesteads. The site visit also included a consultation meeting with the local community, and district representatives and traditional leaders. A meeting was also held with the Ministry of Environment and Tourism on May 3, 2019.

MIGA’s due diligence review considered the environmental and social management planning process and documentation for the Projects, 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 Projects are 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:

Environmental Impact Assessments (EIAs) were conducted for both Projects by Health Earth Environmental Consultants. The EIAs, which included Environmental Management Plans (EMPs), were submitted to the Ministry of Environment and Tourism in March 2016. Environmental Clearance Certificates were issued for both Projects in March 2016; and an updated certificate for the Tandii project was received in January 2019. The updated certificate for the NCF project was issued on January 30, 2019, valid for 3 years. The EIAs adequately identify the potential risks and impacts of the proposed Projects, and the EMPs provide a framework for managing the identified impacts; however, there are some gaps (i.e. cumulative impacts are not addressed; water consumption and socio-economic impact of land acquisition were also not addressed). An international consultant was also engaged to undertake a detailed gap analysis against the PS. Identified gaps have been compiled into an ESAP, which will be included in the Contract of Guarantee.

Management Program and Monitoring:

The EPC consortium has established and is implementing a Safety, Health, Environmental, Quality and Energy (SHEQE) management system for the Projects, which is aligned with OHSAS 18001, ISO 14001, ISO 9001 and ISO 50001 management standards. 

During construction, the EPC has a site management and Environmental Control Officer (ECO) permanently located at the site to oversee the sub-contractors. The ECO covers environment, health and safety matters. All sub-contractors were pre-qualified and are required to comply with the SHEQE management system. Both the ECO and the site manager report to the Corporate Project Manager. An Environmental Management Plan (EMP) has been developed and is being implemented for the construction phase.

The O&M contractor will be required to prepare an Environmental and Social Management Systems (ESMS) for operation (ESAP Action #1). The ESMS will include an Environmental and Social Management Plan (ESMP), Emergency Preparedness and Response Plan (EPRP) and occupational health and safety (OHS) plans and procedures. A monitoring program will be developed as part of the EMP, and annual reports will be developed and submitted to MIGA and relevant authorities.

Emergency Preparedness and Response

An EPRP will be developed as part of the operations ESMS. The EPRP will include identification of assembly points, and description of training and drills to be carried out regularly. As part of EPRP development, the site manager will visit the local fire service to establish a procedure with them in case of fire, during both construction and operations (ESAP Action #2).

PS2:  Labor and Working Conditions

Construction works for the plants created 240 jobs at peak construction, and operations will involve approximately 10 workers per project (20 in total) for maintenance and panel cleaning. The construction workers are hired by the JV EPC (approximately 40 people) and its sub-contractors (approximately 200 people), and operations workers will be engaged by the O&M contractor. For construction, about 70% of the total workforce was recruited from the local area. They have received employment contracts. All personnel entering the site are required to undertake breath testing for any alcoholic impairment. Similarly, the O&M contractor will preferentially recruit workers from the local community.

 

The Project Sponsors have an HR Policy, which will need to be updated to ensure compliance with PS 2 (ESAP Action #3). 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. All staff (including both direct employees and contract labor) are paid above minimum wage.  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 Sponsors 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 policies and procedures for the operations phase in line with the Project Sponsors’ HR Policy and MIGA’s requirements. The HR Policy and procedures will be communicated to all new employees during an induction process.  

 

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 include heat exposure, traffic safety, exposure to welding light and fumes, electrocution, and potential for fires and/or explosions resulting from ignition of flammable materials or gases. As referenced earlier under PS 1, the EPC has an OHSAS 18001-aligned system in place for construction. The O&M contractor will develop and implement OHS plans and procedures as part of the ESMS for operations. Training has and is being provided for every employee as necessary depending on their job duties. Personal protective equipment (PPE) has been supplied to all staff, and all staff will be required to wear appropriate PPE. First aiders and fire wardens will be appointed and trained appropriately. To date there have been no fatalities or serious workplace incidents on site

PS3:  Resource Efficiency and Pollution Prevention

GHG Emissions: The Projects are 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 Projects will avoid 13,000 tonnes of CO2-equivalent (tCO2e) per year, resulting in a total of 315,000 tCO2e over the lifetime of the project.

 

Water Consumption: The Projects water will be supplied primarily by the local utility. During construction, water will primarily be used for concrete batching and dust suppression on roads and during earth moving works. In operations stage, water will be used for sanitary purposes as well as for solar panel cleaning. It is estimated that panel cleaning will require approximately 35 m3 per year Studies indicate that the utility has sufficient water resources to supply this amount with no impact to other water users. The EMP will include water management measures, including measures to encourage water use efficiency (ESAP Action #4).

 

Pollution Prevention: During operations, the solar plant will not generate any noise or air emissions. Most of the impacts will be generated during construction and decommissioning and include temporary noise and dust which has been appropriately managed through water sprinkling as necessary and adhering to strict day time construction hours to avoid disturbing the local communities. Electricity will be provided by the municipality and a 2 x 100 kVa backup generators will be available in case of outages. The generators will be housed appropriately with secondary containment to avoid leakages (ESAP Action #5). The EPC has appropriate measures in place for fuel storage and use during construction, including access to spill response kits. During operations, there will be no vehicle refueling, repair or maintenance on site. All effluent is collected and reused.

 

Wastes: During construction, solid waste consists mostly of concrete and packaging material. During operations, waste will primarily be domestic solid waste. All wastes generated during construction and operation will be properly separated, contained and disposed of. Recycling, waste avoidance and minimization will be carried out as far as is practicable. Borrow pits have been restored. Waste management measures are incorporated into the construction EMP.  A Waste Management Plan and procedures will be developed as part of the operations ESMS (ESAP Action #6).

 

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 #7).

 

Hazardous Materials Management: Provision of secondary containment, drip trays or other overflow and spill containment measures will be implemented in designated areas during both construction and operation. Vegetation control will be 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 Projects are in Enogyi village, Okatope. Potential adverse impacts from construction are increased traffic which may represent a risk for the local population. The construction EMP includes measures for roads and vehicle use, including safety signage and driver training. Other potential impacts associated with construction include noise and air emissions (primarily dust), which will be mitigated as per the EMP (as discussed above).

 

Hazards most directly related to power facilities occur as a result of electrocution from direct contact with high-voltage electricity or from contact with tools, vehicles, ladders, or other devices that are in contact with high-voltage electricity. Signs, barriers (e.g. locks on doors, use of gates, use of anti-climbing devices), and education / public outreach will be used to prevent public contact with potentially dangerous equipment.

 

Security arrangements: The Project Sponsors have engaged a security contractor to provide 24-hour security at the site. The security contractor recruits and trains personnel from the local community. A Security Management Plan will be prepared, which will include a training plan for local security staff (ESAP Action #8). PS 4 requirements will be strictly enforced, including rules of engagement, code of conduct, training of security guards, etc. The site is secured by a double fence, with the inner fence electrified with non-fatal supply. Warning signs are posted every 3m around the perimeter. A CCTV system has been installed along with sensory security lighting.

PS5: Land Acquisition and Involuntary Resettlement

The Projects are located on communal land, which is owned by the Government and administered by the Ondonga Traditional Authority. Approximately 30 ha of land was acquired for the development of the Projects (13.89 ha for NCF, 12.8 ha for Tandii and 2.5 ha for construction facilities, such as storage and equipment laydown areas). Ninety percent (90%) of affected land was previously used for subsistence agriculture, 2% was occupied by homesteads and 8% comprised community land (a sports field and cemetery). Six homesteads (4 for NCF and 2 for Tandii; 27 people) were physically and economically displaced by the Project. All six homestead owners held Customary Land Rights certificates and have already been resettled to new locations near their previous homesteads.

 

Land acquisition was done through negotiated agreements with the affected involving physical displacement of people as per local legislation. There was no Resettlement Action Plan (RAP) prepared prior to resettlement; however, a retroactive RAP was prepared in early 2019 by an international consultant. The retroactive RAP confirms that land acquisition and resettlement were undertaken as per local legislation, which is largely in line with the requirements of PS 5. Compensation valuations were done by a professional valuer, and the resulting land compensation rates were above full replacement value. The Project Sponsors constructed new homesteads of better quality than the previous homesteads (i.e. temporary structures were replaced with permanent, traditional structures). Affected households received both compensation and replacement land for affected subsistence agricultural land. Project Sponsors also facilitated the transition from the old homesteads to the new homesteads.

 

As per the RAP, two phases of external monitoring will be undertaken: (i) compliance monitoring to confirm compliance of the resettlement process with the RAP and PS 5, and (ii) a post-resettlement impact evaluation to determine whether adverse impacts of the Projects have been adequately mitigated and affected homesteads have been able to restore and/or improve their pre-project standard of living (ESAP Action #9).

PS8: Cultural Heritage

Two grave stones of unknown liberation war militants have been identified within the Tandii Project land. Mitigation measures (i.e. encircling the graves with a palisade fence) were identified and implemented in consultation with the Traditional Authority and community. These graves are still accessible in case the identities and families of these militants. A Chance Find Procedure is also being implemented during construction.

In 2016, the environmental permit was approved for the Projects with a validity period of 3 years. The Tandii and NCF Projects both received updated permits, valid for a further 3 years.  During construction and operations, representatives of the Ministry of Environment and Tourism conduct periodic site visits to monitor compliance with Namibian law and the Projects are expected to report to the Ministry every six months.

 

Community Consultation

 

In 2016, during the EIA process, several community consultation activities were completed. Stakeholder meetings were held to discuss the Projects and to provide an opportunity for the affected communities to raise any concerns. Issues raised during the meetings included employment opportunities; distribution of Project benefits and safety of the plants.

 

Additional consultation sessions were held May 2018 prior to the start of construction. The purpose of the 2018 meetings was to inform the community about the commencement of Projects construction, to introduce site managers and senior staff and to discuss community development projects. Project Sponsors have reported that there have been no complaints thus far.  A stakeholder engagement plan (SEP), which includes a grievance redress mechanism (GRM) has been prepared for the Project.

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MIGA supports its clients (as defined in MIGA Policy on Environmental and Social Sustainability) in addressing environmental and social issues arising from their business activities by requiring them to set up and administer appropriate grievance mechanisms and/or procedures to address complaints from Affected Communities.

 

In addition, Affected Communities have unrestricted access to the Compliance Advisor/Ombudsman (CAO), the independent accountability mechanism for MIGA. The CAO is mandated to address complaints from people affected by MIGA-guaranteed business activities in a manner that is fair, objective, and constructive, with the goal of improving environmental and social project outcomes and fostering greater public accountability of MIGA.

 

Independent of MIGA management and reporting directly to the World Bank Group President, the CAO works to resolve complaints using a flexible, problem-solving approach through its dispute resolution arm and oversees project-level audits of MIGA’s environmental and social performance through its compliance arm.

 

Complaints may relate to any aspect of MIGA-guaranteed business activities that is within the mandate of the CAO. They can be made by any individual, group, community, entity, or other party affected or likely to be affected by the environmental or social impacts of a MIGA-guaranteed business activity. Complaints can be submitted to the CAO in writing to the address below:

 

Compliance Advisor/Ombudsman
International Finance Corporation
2121 Pennsylvania Avenue NW
Room F11K-232
Washington, DC 20433 USA
Tel: 1 202 458 1973
Fax: 1 202 522 7400
E-mail:
cao-compliance@ifc.org

  • Construction Environmental Management Plan: NCF PV Plant. AEC / Jabil Consortium. October 2017
  • Environmental Impact Assessment Report for the Proposed 5 MW Solar Photovoltaic Power Plant with 66 kV Powerline and Access Road next to the NamPower Substation at Okatope, in Engoyi Village, in the Oshikoto Region, Namibia. NCF Energy Pty Ltd. Health Earth Environmental Consultants. March 2016.
  • Environmental Impact Assessment Report for the Proposed 5 MW Solar Photovoltaic Power Plant with 66 kV Powerline and Access Road next to the NamPower Substation at Okatope, in Engoyi Village, in the Oshikoto Region, Namibia. Tandii Investments Pty Ltd. Health Earth Environmental Consultants. March 2016.
  • Resettlement Action Plan: NCF 5 MW Solar Energy Plant and Tandii 5 MW Solar Energy Plan – Engoyi Village – Namibia. BSC Consulting. May 2019
  • The above listed documentation is available electronically as PDF attachments to this ESRS at www.miga.org.  It is also available for viewing at the following locations:

  • Chris Botha, Evolution Africa (chris@evolution-africa.com)