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Lesotho

Neo 1 Solar Lesotho

$18.3 million
Power
Environmental and Social Review Summary
Proposed

Environmental and Social Review Summary

Neo 1 Solar

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.

 

Renewable Energy Performance Platform of the United Kingdom (REPP); the Guarantee Holder (“GH”) is seeking MIGA coverage for Breach of Contract (BoC) cover for the GH’s 15-year, non-shareholder loan into Neo 1 SPV (Pty) Limited of Lesotho; the Project Enterprise (“PE”). Neo 1 SPV (Pty) Limited (a consortium that includes Scatec Norfund Lesotho JV B.V., Sotho Solar Holding SPV (Pty) Ltd., Public Officers' Defined Contribution Fund and Izuba Energy LLC.) was selected by the Government of Lesotho to develop, construct, and operate a 20MW solar project (“the Project”) in the Tsana Talana Council of the Mafeteng District, in the southwest of Lesotho. As part of the Project, the PE will also construct i) a short gravel site entrance road, 10m in length and 6m wide, which will connect from the existing gravel access road; and ii) a 33kV transmission line, which is approximately 1 kilometer (km) in length, that will connect the Project to the existing substation that is operated by Lesotho Electricity Company (LEC). Once the transmission line is constructed, the line will be transferred to LEC, and as owners LEC will be responsible for ongoing O&M, and during operations it will be considered an Associated Facility to the Project.   

The plant infrastructure will be constructed on a 66.9 -hectare (ha) plot of land on a greenfield site that was previously used for subsistence farming. The power plant will use crystalline silicon PV technology to convert sunlight into electricity. This project will employ solar PV panels mounted on single axis east to west trackers. It is anticipated that direct current combiners will be utilized to route power to four 6MW inverter blocks, and a step-up transformer for the 33 kV connection to the LEC substation.

Scatec has been appointed as the Engineering, Procurement and Construction (EPC) and Operations and Maintenance (O&M) Contractor for the Project during the construction and operations phase, respectively. The EPC is responsible for construction of the Solar PV plant, the 10m site access road, as well as the 1 km transmission line from the Project site to the existing Mafeteng substation.

The nearest village to the project site is Ha Raliemere at approximately 600 meters, followed by Ha Ramarothole at approximately 1.5 kilometers and lastly Ha Lempetje, at almost 2 kilometers. The PE has subleased the land from 36 community landowners who consolidated their plots into a single land title, to be administered jointly under the ownership of a single Property Company named Likhoele Khubetsoana Proprietary Limited. The Property Company is owned and managed by all 36 landowners.

The construction labor force will be sourced from the local communities, as and when required, which means they reside in their residences and the Project will not include on-site accommodation facilities. Labor force from outside of the communities will reside off site in worker’s accommodation rented by the PE in Mafeteng. Construction is expected to commence in August/September 2022 and will last approximately 8 months.

This is a Category B project according to MIGA’s Policy on Environmental and Social Sustainability. (2013). The Project is expected to have potentially limited adverse Environmental and Social (E&S) risks, which will be few in number, site-specific, largely reversible, and readily addressed through mitigation measures. These impacts can be avoided or mitigated by adhering to applicable Performance Standards (PSs) and World Bank Group (WBG) Environmental Health and Safety (EHS) guidelines and design criteria.

During construction, key E&S risks and impacts include (i) stakeholder engagement, (ii) labor and working conditions, (iii) fire and life safety, (iv) ground water abstraction, (v) wetland restoration and rehabilitation (vi) community health, safety and security, (vii) contractor management, (viii) external grievance mechanism (including gender-based violence (GBV)), (x) security, xi) COVID-19 risks (to workers, contractors and communities),  and (xii) potential forced labor related to solar supply chain.

While all PSs are applicable to this Project, current information indicates that the Project will have impacts which must be managed in a manner consistent with the following PSs:

  • 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
  • PS6: Biodiversity Conservation and Sustainable Management of Living Natural Resources
  • PS8: Cultural Heritage

The land for the solar plant was originally subsistence agricultural/grazing land that was split into 39 land parcels owned by 36 landowners. The landowners jointly leased their land to the PE through a ‘willing lessee, willing lessor’ agreement for 25-year sublease (see PS 1 section for details). The land for the transmission line, and 13m servitude within which it is to be developed, is predominantly subsistence agricultural/grazing land and will be acquired through a once off servitude payment applicable under PS5 on Land Acquisition and Involuntary Resettlement.

There is no indication or evidence of indigenous people residing in or having cultural ties to the Project area, thus PS7 Indigenous Peoples does not apply.

In addition to the PSs, the WBG General EHS Guidelines and sector specific EHS guidelines for Electricity Transmission and Distribution apply to this Project.

The following documents were reviewed by MIGA:

In addition to the Project documents above, an Independent Environmental and Social Consultant (IESC) hired by the PE conducted E&S due diligence in December 2021, which included reviews of E&S documentation, site visit by an in-country IESC partner including meetings with the affected landowners. MIGA conducted its due diligence, which included a site visit to the Project area from April 5th until April 8th, 2022, during which MIGA met with government officials, WBG local representatives, Project E&S team (that included Scatec E&S Manager, Project Community Liaison Officer and representatives from the local communities affected by the Project (Chiefs, community directors and landowners).

MIGA’s due diligence review considered the E&S management procedures and documentation being developed, and which will be implemented 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 MIGA’s PSs.

Key E&S issues associated with the Project’s 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 PE has developed a draft project- specific Environmental and Social Management System (ESMS) for the construction phase. As per the ESAP, the PE will be required to update and finalize the Project specific ESMS and ensure it is in line with MIGA PS 1 requirements. The ESMS will include the following items: (i) Health and Safety, Security and Environmental (HSSE) Policy (health, safety, security and environmental monitoring and reporting); (ii) definition of organizational capacity, responsibilities and competence; and (iii) E&S management programs and plans (such as emergency preparedness and response mechanisms, management of hazardous and non-hazardous waste, and stakeholder engagement). Moreover, at the corporate level, Scatec (EPC and O&M Contractor)’s management system is ISO 14001 (environment), ISO 9001 (quality) and ISO 45001 (occupational health and safety) certified. For the operational phase, the PE will be required to update the ESMS to cover operational related risks per the ESAP.

Policy

The PE has in place corporate policy statements that demonstrate their commitment to E&S management which includes commitments related to sustainability, human rights, environment, stakeholder engagement, health, safety, security, human and labor rights and workers conduct. The PE has developed a draft HSSE Policy as part of the Project ESMS. Therefore, the PE will update and finalize the E&S Policy as part of the ESMS in line with MIGA PS 1 per the ESAP.  

Identification of Risks and Impacts

The land was selected for technical reasons, such as the high irradiance of the western lowlands, proximity to the Mafeteng substation and the existing LEC 132kV transmission line, its gradient characteristics, and the absence of physical (residential) structures on the Project site. There were however unused subsistence agricultural plots on the site which will be leased through a sublease thus, and this is discussed under Stakeholder Engagement below.

On March 17th, 2017, the Lesotho Department of Environment (DoE) approved the decision for the Project (Ref: MTEC/NES/PRO21) based on several conditions including consultation with local communities, adherence with the Water Act 2008 and adhering to the Lesotho Electricity Company (LEC) safety regulations. An E&S Impact Assessment (ESIA) was undertaken and completed in Nov 2019 by Royal Haskoning DHV, and covered construction, operation, and decommissioning phases of the Project. In addition, the PE will develop an ESIA addendum,  including the amended transmission line route, reflecting the Project design changes and proposed mitigation measures designed to avoid further Project impacts per the ESAP. On March 15, 2022 application for change of scope was made to the DoE for the establishment of an independent 33kV transmission line, consisting of wooden monopoles, within a new servitude running adjacent/parallel to the existing Ha Makhakhe 33kV transmission line, rather than upgrading the existing single circuit infrastructure to double circuit. The proposed change of scope was approved by the DoE on 13 April, 2022.

On August 27th, 2021, the Ministry of Water, Department of Water Affairs (DWA) approved a water use permit for groundwater abstraction for the Project. Water monitoring technology will be installed to ensure compliance with the permitted abstraction volume in addition to the implementation of the wetland rehabilitation plan. The DWA also issued approval for the project to be developed within the identified wetland areas. The DWA approval was on information provided in support of the application, as well as a joint site visit with the PE to assess the potential impacts of the project on the wetland areas. Water management, wetland rehabilitation and the corresponding ESAP action items are discussed extensively under PS3 and PS6 respectively.

Lesotho is highly vulnerable to climate change impacts and Mafeteng district is one of the most vulnerable areas in terms of high climatic risk, couple with poor socio-economic status. Since 1960, Lesotho’s mean annual temperature increased by 0.76°C, with an average rate of increase of 0.20°C per decade. Furthermore, changes in seasonal rainfall patterns have revealed progressive increases in winter season precipitation (June to August) accompanied by an opposite trend in the summer season. This has led to drying out of traditionally perennial springs, and reduced flows on major rivers.   

A climate risk screening was conducted for the Project site using MIGA’s Climate Risk Screening Tool and supplementary World Bank climate datasets and materials. Based on this information, it is predicted warmer temperatures and a change in rainfall patterns on the Project’s location. Scenarios also show an increased intensity and frequency of extreme weather events such as droughts and floods. Under a high-emission scenario, mean monthly temperatures changes are expected to increase by more than 2.0°C for the 2050s and by 4.4°C by end of the century. Lowland districts in Lesotho are expected to have below normal rainfall through the end of the century of between 50 and 100 mm per annum. Of these, increasing temperature presents the highest risk to the Project; followed by uncertain changes in precipitation trends that can intensify precipitations.    

A Climate Change Environmental Impact Assessment, as part of the ESIA, was conducted and included the identification of the plant’s vulnerabilities to projected climate change and the recognition of any impacts of the plant on climate change related risks and vulnerabilities in the immediate surrounds. It was concluded that the facility’s performance may be affected by increased temperatures that reduce the efficiency of the panels and intense rainfall that threatens its physical integrity. To mitigate the identified climate-related risks, appropriate measures will be developed as part of the routine planning and management of the project – such as erosion management through vegetation management and soil stabilization. In addition, regular monitoring will be implemented to ensure early detection of issues. These measures will be incorporated in the construction and operational management plans, and procedures where relevant, per the ESAP.  

The Project is located adjacent to wetlands, which are a main source of water and forage resources for livestock in Lesotho; and provides essential ecosystem services. In this sense, the construction and operation plan of the Project will include wetland rehabilitation measures within the wetland areas on the site to limit disturbance and impacts on wetlands, and to avoid leaving wetland areas unrehabilitated for a period of time. The ESAP action items related to this are discussed broadly under PS6.    

Management programs

A framework Environmental, Social, Management Plan (ESMP) was prepared for the PE as part of the ESIA, for the construction, operational and decommissioning phases of the project. The management plans cover topics such as air quality, noise, soil, water resources, solid and hazardous waste, wetland rehabilitation and management plans, and health and safety, amongst others.  The ESMP include details on monitoring actions, the frequency of monitoring, performance indicators and the responsible entity EPC contractor / O&M provider. The ESMS defines management programs related to risks and impacts identified in the ESIA. The PE will ensure that relevant management plans will be integrated in applicable sub-contracts and will be fully implemented during the construction phase. The PE through its EPC will ensure that the ESMPs for construction are project specific and align with MIGA PS1 per the ESAP. For the operations phase, the PE will be required to update the ESMP to cover operations related risks per the ESAP. The project will ensure that workers understand the requirements, measures, and protocols stipulated within the ESMP through induction training and a workers’ manual that is translated into English and Sesotho. 

A detailed decommissioning and rehabilitation site closure plan will be developed in line with the PSs and General EHS Guidelines prior to decommissioning the solar PV plant and associated infrastructure in consultation with the various stakeholder groups per the ESAP. This plan will include, but will not be limited to, management of socio-economic aspects such as employment loss, removal, re-use and recycling of materials and vegetative rehabilitation to prevent erosion.

Organizational Capacity and Competency

The Project’s E&S organizational structure is partially developed.  During the construction phase, the project will be managed by the Scatec team. The E&S manager and the Community Liaison Officer (CLO) have been already appointed to manage the project related E&S risks. The PE also plans to appoint a Health, Safety, Security and Environment (HSSE) Officer, and an additional CLO who will be based on the Project site in Lesotho. The PE will also appoint an independent Environmental Control Officer (ECO) and Wetland Specialist. The PE will be required to appoint the E&S team prior to signing of the Contract of Guarantee per the ESAP. The Project E&S organizational capacity in Lesotho is supported by the corporate E&S team based in South Africa. Key corporate E&S staff consist of an E&S Manager, HSSE Advisor and Manager, a Human Resources (HR) Director, as well as HR Manager and Industrial Relation (IR) Manager, and Project Manager (PM), who are all based in South Africa who will provide oversight at the project-level during construction and operations.

Per the EPC Contract, the EPC will ensure to hire competent qualified, and experienced personnel in their respective trades or occupations for the project development. Additionally, the EPC Contractor will ensure that all the contractors and sub-contractors comply with the national laws and MIGA PSs.  This will also ensure that all E&S personnel are competent to carry out their duties through the hiring and selection process, or, where necessary, arrange for suitable training to be undertaken to achieve this level of competency before construction starts.

Emergency Preparedness and Response

A draft project level Emergency Preparedness and Response Plan (EPRP) has been developed and will be updated to be in line with MIGA PS1 requirements per the ESAP. The EPRP will detail emergency response procedures in the event of fire/explosion, floods, drought, electric shocks, severe traffic accidents, storms/high winds, hazardous material spills, and violence and/or social unrest. The EPRP also describes reporting requirements and roles and responsibilities of the PE and the EPC contractor. The EPRP will be incorporated into the contract documentation with subcontractors.

Monitoring and review

As part of the ESIA, an Environmental and Social Monitoring Plan (ESMP) was developed. The monitoring plan requires the Project to monitor the implementation of mitigation measures set out in the ESIA (air and noise pollution, soil erosion and contamination, employment statistics, waste management, accidents etc.). Therefore, as part of the ESMS/ESMP, the PE will require the EPC and O&M Contractor to develop an HSSE Inspection and Audit Plan and ensure that all the EHS monitoring reports detail EHS risks, OHS statistics, and mitigation measures during the construction and operations phase per the ESAP. The Project EPC Contract includes a provision for regular progress reporting and the EPC Contractor is required to submit monthly progress to the PE including EHS related information.  Scatec will keep all the project documentation in an online central repository whereby each project level document is reviewed and updated, if/when needed. Internal site audits will be conducted monthly by the site safety officer, with audits from Head Office to be undertaken once in 3 months (quarterly) depending on availability of auditors (HSE Advisors).  Findings will be closed off accordingly.

Stakeholder Engagement

In the preconstruction phase, engagement was focused on the ESIA, land acquisition, the formation of the Property Company and the development and signature of the sublease agreement. Stakeholder engagement was conducted during the ESIA process and included scoping level engagement and baseline data collection. Records of these engagements are included in the ESIA Report. The Project engaged with a cross section of stakeholders including national and local government, affected communities including vulnerable groups, and NGOs.

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 2017, the formation of the Compensation Committee prior to the agreement to establish a Property Company, information disclosure methods including disclosure in local language, and a stakeholder engagement strategy. The strategy outlines activities undertaken during the scoping and ESIA phases of the Project. A SEP has been developed for the project which is an update and replacement of the SEP document compiled during the project ESIA in 2019. The SEP will be implemented by the EPC.  The PE will submit the finalized SEP (2021) that covers the construction and operations phases and is in line with MIGA PS1 requirement per the ESAP.

The PE carried out stakeholder engagement activities during the scoping and ESIA phases to inform affected stakeholders of upcoming Project activities and schedule. In addition, the Project’s CLO has been in place since 2017 and has been in regular contact with communities throughout the process. Records of these engagements are included in the ESIA Report. The Project engaged with a cross section of stakeholders including national and local government, affected communities including vulnerable groups, and NGOs.  ESIA disclosure was undertaken in November 2019 through local Authorities and in line with Lesotho EIA Guidelines and MIGA PS. The Project disclosed a non-technical summary of the ESIA in English and Sesotho as part of the ongoing communications with various stakeholders. The PE has developed a formal external grievance mechanism as part of the ESMS which will be submitted to MIGA per the ESAP.  

External Communications and Grievance Mechanism

The PE will submit the formal external Grievance Mechanism (GM) available to stakeholders to MIGA per the ESAP. The CLO, who has been in place since 2017, receives both verbal and written grievances from the community members. Initial grievances were around the land compensation process (e.g., compensation delays) and these were recorded and are due to be closed out following the second payment and the PE’s signing of the sublease agreement. The PE will update the draft external Grievance Mechanism, which will include Gender-Based Violence and Harassment (GBVH) reporting mechanisms, for the construction and operation phases per the ESAP. The mechanisms shall include methods to receive, register, screen and assess, track, respond to, and act upon external inquiries and complaints from the public during construction and operations. The grievance mechanism shall ensure that grievances from affected communities and external communications from other stakeholders are responded to and managed appropriately. It will also have channels for handling sexual exploitation, abuse and harassment (SEAH) grievances that are confidential, safe, and accessible to different groups and prevent stigmatization and reprisals.

Solar Plant ‘Willing Lessor, Willing Lessee’

The land for the solar plant was originally unused subsistence agricultural/grazing land that was split into 39 land parcels owned by 36 landowners. With the assistance of an independent legal counsel, the landowners jointly leased their land to the PE through a ‘willing lessee, willing lessor’ 25-year sublease which was established and signed by the landowners in February 2022.  The PE countersigned the sublease agreement in April 2022.

Two independent valuations were conducted for the Project site: one for the PE and one for the Property Company landowners. The PE proposed a higher rate than the independent valuations, and the landowners requested a minimum annual payment for individuals whose fields are less than 10,000 square meters size which was agreed to by all parties. The land valuation rates according to replacement cost and the annual CPI will be re-assessed each year to ensure that market related land value plus CPI is considered in the landowner payment.

Instead of signing individual sub-lease agreements with the PE, community landowners decided to consolidate all 39 plots into a single land title, to be administered under a single Property Company. The comprehensive legal process to establish the Property Company was conducted by an independent legal counsel whose fees were covered by the PE. Within the company, landowners are referred to as shareholders which reflect each shareholder’s respective ownership portion of the overall land. However, voting is equal amongst all participants, regardless of their plot size. The shareholders elect six Directors on an annual basis, three Project Affected People and three non-Project Affected People from the three neighboring communities. Currently there are two women and four men at the Director-level. Training will be provided to the Company Directors related to their roles and responsibilities per the ESAP. As per the lease agreement, shareholders have received an initial payment, with a second made at the end of May 2022. They will also receive a quarterly payment, which is weighted pro-rata to each shareholders’ respective ownership portion of the land, for the duration of the sublease agreement.

A claims procedure was agreed by Likhoele Khubetsoana Proprietary Limited and its shareholders in November 2020 on the standard claims procedure relating to crop compensation on the site, if found prior to construction. The independent expert will determine the premium market (retail) rate, including replacement costs and the offer will be presented to the relevant landowners for acceptance. Any disagreement will be resolved via the project’s Grievance Mechanism per the ESAP

PS2:  Labor and Working Conditions

The PE has a Human Resources (HR) Manager and an Industrial Relations (IR) Manager for the Project at the corporate level who are based in South Africa. Scatec will be the EPC and O&M contractor, and will appoint the Sub-EPC for this Project. The Sub-EPC will be responsible for hiring and management of labor (i.e. HR/IR), with strong oversight from the EPC. During peak construction there will be approximately 200 workers, including contractors (both general and skilled) on the Project site across the 8-month construction phase. Approximately 10 people will be employed during operations. During construction, working hours will consist of an eight-hour shift, five days a week with the possibility of working 5 hours on a Saturday.

Human Resources Policies and Procedures

The PE developed a HR Manual which adheres to the Lesotho Labor Code Order, 1992 and will be implemented for the construction and operations phases covering all types of workers, including direct workers and contractor /sub-contractor workers. The PE will update the HR Manual to be consistent with PS2 requirements per the ESAP. The purpose of this manual is to regulate and standardize the conditions of employment for all the employees and secondees on the Project. The terms and conditions of the HR Manual are binding to the Sub-EPC, it’s contractors, sub-contractors, and their employees, compelling all parties on the Project to comply with PE Policies, Lesotho national laws and all other agreements. The PE ESMS includes a Labor Management Plan to which the Sub-EPC is to conform. This ensures that all contracted workers have the same employment terms and conditions related to working hours, Code of Conduct, renumeration etc.

The PE has developed a Recruitment and Mobilization Plan which commits to provide hiring opportunities and priority to local community members. The host communities will be provided with recruitment opportunities first before hiring from non-host communities. The hiring process will be centrally managed by the Sub-EPC management whilst the EPC HR Management will monitor compliance to the Project HR Manual and management plans. It is anticipated that approximately 80% of recruitment will be for unskilled workers. The PE has a corporate level target that 20% of staff will be female. An Influx Management Plan will be developed to manage influx into the Project area per the ESAP (see further details in the PS4 section below).

The PE has developed a training plan. Induction training on the HR Manual and basic safety awareness training will be provided to all newly hired workers. Other types of technical skills training are identified for staff on an as-needed basis.

The EPC will rent accommodation in the nearby village of Mafeteng for workers requiring accommodation. The PE will monitor these accommodations to ensure they are compliant with MIGA’s PS2 requirements as well as the International Finance Corporation’s (IFC) and the European Bank for Reconstruction and Development (EBRD) guidance note on Workers' Accommodation: Processes and Standards. Unskilled workers and security personnel live in nearby villages and leave for home at the end of their shifts.

The Project’s monitoring plan includes internal and external labor audits (including contractors labor management system) and a detailed schedule is being developed as per the ESAP.

Per MIGA ESDD findings the PE will develop and submit the GBV/SEA plan to MIGA. The PE will also incorporate GBVH aspects into the Worker Code of Conduct, the HR Manual, and provide GBVH awareness training for all staff in line with national laws and MIGA PS 2 per the ESAP. The PE will also ensure that the EPC and O&M Contractors will adopt and implement these policies, provide a copy to all their staff, and report any GBVH grievances to PE management for action. In addition, the PE will develop and implement a Gender-Based Violence and Harassment (GBVH) Procedure, which will provide an analysis of gender associated concerns to be built into the stakeholder engagement plan.

Workers’ Organization

In line with PS2, the HR Manual and Labor Management Plan do not impede workers from freedom of association and collective bargaining. The PE is committed to abide by the requirements of the Lesotho Labor Code Order (1992) through the Project HR Manual which protects employees’ rights to freedom of association and collective bargaining in line with the requirements of PS2. The Lesotho Congress of Democratic Unions (LECODU) is the national trade union in Lesotho. As per the Project HR Manual, workers are able to participate in the establishment of a union, or form a project forum, if not already members of a union.

Non-Discrimination and Equal Opportunity

The PE has committed to the principles of employment equity, equal opportunities, and empowerment, regardless of gender, race, color or creed or medical status. The EPC includes in their HR Manual and management plans a formal policy on non-discrimination and equal opportunity.

 

Worker Grievance Mechanism

A draft Worker’s Grievance Redress Mechanism has been developed to provide employees of the PE and/ or its contractors with a clear process through which to raise issues, concerns, or complaints. The workers grievance mechanism is to be finalized per the ESAP. The mechanism also ensures anonymity, if requested.  

 

Occupational Health and Safety (OHS)

The key occupational health and safety (OHS) risks for a PV project during construction include slips and falls, potential hazards from on-site moving machinery, heavy load lifting, exposure to electric shocks and burns, and safety issues related to PV module assembly.  The PE has developed Health, Safety, Security and Environment (HSSE) Specifications which contain procedures for site-specific OHS risk assessment including the hazard and risk identification process, emergency response, first aid, working at heights and hazardous materials, etc. and will be shared with MIGA per the ESAP. The PE has indicated that OHS documentation will be available on site through a centralized database and that site staff will be trained on the full range of OHS procedures. Daily toolbox talks covering risk assessments to be utilized that day will occur. A full-time on-site HSSE Manager will be appointed for the duration of the Project construction phase. The HSSE Manager will be responsible for coordinating health and safety audits, identifying potential hazards and risks, participating in accidents/ incidents investigations, making recommendations regarding health and safety, conducting safety inductions, organizing health and safety meetings, ensuring regular HSE reporting and managing HSE documentation. Contractors are also required to provide onsite HSE officers to oversee their respective work programs.

Local employees will be trained in fire, life safety and first-aid on-site. An onsite water bowser will be installed in case of fires. In case of emergency during construction, the PE will have a first aider and first aid kits onsite. There is a clinic and hospital, with emergency response located in Mafeteng, approximately 12km from site, that will be utilized. The PE has also subscribed to International SOS for evacuation to a private hospital in Maseru, if needed.

The Coronavirus Disease 2019 (COVID-19) has potential risks and impacts for the Project.  The PE have developed a COVID-19 Management Plan. The plan includes provision for training and awareness, mitigation measures during construction activities, actions in the event of a positive case, and hygiene precaution. During the operation phase, the PE will require the O&M Contractor to develop COVID-19 policies and procedures to ensure COVID-19 risks are adequately addressed per the ESAP.

Workers Engaged by Third Parties

The PE has a Project HR Manual in place, which will be updated to include procedures and a template for standard contractual obligations to ensure that contractors’ labor and working conditions comply with the requirements of PS2. The EPC will include HSE provisions in sub-contractors’ contracts. These provisions include as a minimum: compliance with labor legislation, terms of OHS management, fair working conditions and access to a workers’ grievance mechanism including review and response to anonymous complaints. The PE will monitor third-party compliance with approved HSE requirements.

Supply chain

The EPC and O&M contractor (Scatec) have developed supplier conduct principles reflecting principles including complying with laws, health and safety, prohibition of forced and child labor, human rights and working hours etc. Scatec ensures that all their suppliers sign and adhere with these principles, and the same requirement will be applied by the PE. Scatec have also developed supply chain procedures and a screening mechanism against risks of forced and child labor, which will be implemented for the Project. 

PS3:  Resource Efficiency and Pollution Prevention

Pollution Prevention

During the construction phase, the project will source electricity from LEC municipal supply and use a backup diesel generator (up to 40 kVA anticipated) at the site camp / offices and various mobile generators (up to 7.5 kVA anticipated). For the operation phase, the project plans to utilize a single standby generator (150kVA), with internal bunded walls on a plinth with a fuel tank built in, to facilitate 24hr operations. The use of the generators will locally impact air quality and require fuel management and containment. As part of the ESMP, the PE will require the EPC and O&M Contractor to develop a generator management plan that defines fuel use, regular maintenance, and provision of adequate measures for air quality (such as the use of air filters), noise control and waste management relevant to site to manage pollution related aspects of the project in line with the WBG’s EHS Guidelines. Aspects should cover, among others dust, management of waste, hazardous materials, spills, occupational noise, etc.

 

Resource Efficiency & Water

Resource consumption is expected to be limited, with the main resource utilized during construction being the use of water for dust suppression, concrete production, and domestic usage. During operations, the main water use will be cleaning the PV modules and domestic usage. The Project will source water from an existing borehole which has been drilled within the project site per the water permit conditions. The water system (i.e. pumps, meters, etc.) will be installed by the sub-EPC during site establishment. The PE have obtained all the relevant approvals and permits from the Ministry of Water. Alternatively, water will be trucked in from a municipal source. During construction, the project will require approximately 150m3 /MW (or 3000 m3 in total) and approximately 20m3 /year during operation. The Project panels cleaning methodology used will be a combination of wet and dry cleaning. 

 

The PE has developed a Water Management Plan which details sustainable use of water through the installation of water meters which are calibrated to measure abstracted water volumes on a daily basis. Therefore, as per the Water Management Plan, the PE will be required to install the water monitoring meter on the borehole to ensure sustainable use of water per the ESAP.  The PE will also implement water saving measures to minimize water use as well as the installation of water saving devices (e.g., dual flush toilets, automatic shut-off taps, rainwater harvesting tanks, re-use of treated wastewater, etc.).

 

Wastewater

The PE has developed a project level Waste and Wastewater Management Plan. Wastewater is estimated to be minimal both during the construction and operation of the Project. Wastewater from construction activities includes temporary sanitary facilities, stormwater, and drainage over potentially contaminated areas (e.g., concrete batching/mixing areas and equipment storing areas). All sanitary products will be contained within receptacles supplied by a contractor. The contractor will also be responsible for disposal of these wastes. Grey and black water will be retained for disposal through approved pump out facilities. All wastewater from general activities in the camp will be collected and removed from the site for appropriate disposal by a licensed vendor. Given that the Project is partially located within a wetland, the PE will require the EPC contractor find alternatives to having above ground toilets and not develop an underground septic tank to avoid sewage spillage and seepage into the wetland and minimize impacts on the wetland and the water systems per the ESAP.

 

Air Emissions

As part of the ESIA, an Air Quality Assessment (2019) was undertaken. During the construction phase, it is anticipated that the main sources of air emissions will be due to the use of the diesel generators and dusts from construction related activities (access roads construction and the clearing of the plant area). During operations, the main sources of air emissions will mainly relate to traffic on access roads. Several mitigation measures were recommended in the Air Quality Assessment (2019) such as wind breaks, dust suppression, wet suppression, and paving. These recommendations have been incorporated into the ESMP.

 

Solid Waste Management

Waste generated during the construction phase includes general domestic waste, including plastic packaging, cardboard packaging, scrap metal and cabling, timber pallets etc. As mentioned above, there is a Waste and Wastewater Management Plan in place. Waste is to be separated at source and labelled bins located within the Project site for the storage of the various categories and either disposed to a local registered landfill or recycled, where possible, by licensed contractor. During operations, waste is estimated to be minor and limited to general office and administrative products, minor maintenance wastes (empty paint tins, oil containers etc.), and redundant or damaged plant equipment. The PE has identified that there are licensed waste disposal areas for general waste in the Mafeteng Urban Council and Maseru City Council in Lesotho which will be utilized. Conditions on waste management are also included in the project’s environmental permit.

Hazardous Materials Management

The hazardous waste will be likely to comprise fuel, oils, lubricants, hydraulic/insulating fluids and batteries, tires, metal drums, and empty chemical containers. However, there is currently nowhere for these materials to be disposed of in Lesotho, therefore, they will be disposed of in South Africa. The Project includes the management of hazardous waste in the Waste Management Plan and spills are covered under the EPRP. A licensed company for general and hazardous waste transport and disposal will be selected by the PE in consultation with the EPC contractor and EPC subcontractor. The company is to be appointed by the EPC subcontractor during construction. Broken PV modules will be managed in line with the Waste Management Plan, whereby they will be disposed of as hazardous waste via a registered/licensed service provider. Proof of disposal will be retained on file. 

Greenhouse Gases

Based on the Climate Change Assessment (2019) the project will result in an emissions reduction of approximately 47kt CO2eq per year. During construction, the generation of greenhouse gases associated with the Project will be minor and will be limited to fuel combustion and transportation of equipment to the site during construction. During operations, the Project will be supplied with solar-generated electricity and generator/electricity purchased from LEC when the Project is not generating electricity. Therefore, reporting GHG emissions to MIGA is not required under MIGA’s PS3.

PS4: Community Health, Safety and Security

Community Health and Safety

Community health and safety is currently managed by the PE’s E&S Manager and the Community Liaison Officer (CLO) who is based on-site since 2017. The PE plan to hire an additional CLO prior to construction per the ESAP. During the construction phase, potential community risks will include nuisance from noise and dust, traffic accidents, accidents and injury on active construction sites due to presence of equipment and machinery, and risks of increased HIV/AIDS, GBVH and STDs due to worker community interactions or potential influx of economic migrants (workers). Community awareness regarding safety aspects of transmission line infrastructure will be undertaken during project implementation. The PE has developed a Community Health, Safety and Security Management Plan (CHSSMP) which addresses the risks related to STDs as further detailed below. The PE has also developed a Workplace Code of Conduct which will include measures to prevent GBVH and training on GBVH for all employees including contractors per the ESAP. The PE will develop a GBVH Plan and GBVH Procedure per the ESAP. In accordance with the SEP, the PE will partner with an NGO in the implementation of community-related activities in the GBVH Plan and Procedure per the ESAP. The PE will also develop an Influx Management Plan to address the risks associated with the potential influx of migrant workers per the ESAP. During operations, the potential risks are anticipated to be minimal.

The PE has developed an Emergency Preparedness and Response Plan (EPRP) which covers key aspects such as: managing flood and fire emergencies on-site in relation to community members, ensuring communities are protected against potential health and safety hazards arising from project equipment and project activities; and ensuring project-related vehicle traffic does not pose unnecessary risk to communities.

The PE has developed a transport safety plan, each EPC subcontractor will develop a Construction Traffic Management Plan per the ESAP. On potential for increased traffic risks and impacts to the communities, it is expected that the EPC contractors will not cause any disruption to communities as the EPC Contractors will not transport any heavy loads on roads nearby to communities to lessen potential for traffic or road blockages.

Community Exposure to Disease

The PE has developed a CHSSMP which includes STD and HIV management. The CHSSMP commits the PE to screening and monitoring of STDs and HIV amongst the workforce, providing awareness and education amongst the community with regards to occupational diseases and to help to facilitate the logistical arrangements for the services provided by the local health clinic. All workers will undergo entrance and exit medicals, to be undertaken by an appointed service provider.  

Security Arrangements

Site security will be contracted to a professional private security firm who will provide trained unarmed security personnel. All security personnel will be trained on GBV and in line with the United Nations Voluntary Principles on Security and Human Rights. The PE does not sanction any use of force except when used for preventive and defensive purposes in proportion to the nature and extent of the threat. The Security Management Plan will be updated to incorporate all of these measures per the ESAP. The PE has developed the CHSSMP which requires that the security contractor will operate in a manner which meets the requirements of MIGA’s PS4 and local regulations. To ensure alignment with MIGA’s PS4 requirements for security arrangements, the EPC will request the appointed private security firm to provide results of screening against previous convictions will train them adequately in the use of force, and appropriate conduct toward workers and nearby communities; and require them to act within the applicable law.                                              The PE will update their grievance mechanism to enable nearby communities to express concerns about the security arrangements and acts by security personnel, if required per the ESAP. The site is fenced and public access to the solar plant is restricted to authorized personnel.

 

PS 5: Land Acquisition and Involuntary Resettlement

The 36 landowners jointly leased their land to the PE through a ‘willing lessee, willing lessor’ agreement 25-year sublease as detailed above in PS1. PS5 is applicable in relation to the establishment of the transmission line (TL) as there are 2 land parcels, which a section of the TL traverses, that may result in economic displacement for the 2 landowners, who will be compensated through separate agreements. The land over which the TL passes was originally subsistence agricultural/grazing land. The affected parcels are currently used for communal grazing purposes. The PE will acquire a 13m wide servitude for the TL, which will impose restrictions on the landowners in terms of land use. These restrictions include against establishing structures, and for vegetation not to exceed a height of 3.5m, within the servitude area.  

Project Design

Initially, per the ESIA, the TL was approximately 1.1. kilometers impacting 5 land parcels and 5 landowners. The TL route and associated servitude was amended in early 2022 and now mainly traverses LEGCO owned land and 2 land parcels, affecting 2 landowners. The majority of the now 1 km TL traverses the Project site (approximately 210m) and LEGCO owned land (approximately 540m).

Compensation and Benefits for Displaced Persons

The 2 landowners affected by the TL will receive a once-off compensation in terms of the servitude right for i) establishment of any infrastructure (i.e. pylons and anchors) on their land, ii) an inconvenience payment (due to imposed restrictions) which is a percentage of the land value (15% of market value of land per square meter affected) as they retain ownership and use of the land, and iii) for any assets on their individual plots (including crops) per the ESAP. The PE will be required to conduct the valuation process and compensate the 2 landowners adjacent to the transmission line for any assets on individual plots (including crops) as a servitude right in line with MIGA PS5 per the ESAP. Landowners can continue land use practices following construction, within certain restrictions (including the avoidance of building structures, and trees over a 3.5m within the servitude, which extends 6.5 meters on either side of the TL (i.e. 13m wide in total)). The PE has developed a claims procedure which will be applied to the 2 landowners within the TL servitude whereby the PE will notify all landowners of the mobilization date one month prior to construction, an independent expert will determine the premium market (retail) rate, including replacement costs and the offer will be presented to the relevant landowners for acceptance. Any disagreement will be resolved via the project’s Grievance Mechanism, which is yet to be finalized per the ESAP.  

Community Engagement

As part of the ESIA process, the PE commenced community engagement with the three village chiefs in 2017 to identify landowners in the project area including the transmission line routing and servitude.

Grievance Mechanism

A Grievance Mechanism and a Grievance Committee will be established by the PE per the ESAP which will also be available to the 2 landowners affected by the transmission line. The Grievance Procedure will be free, open and accessible to all and comments and grievances will be addressed in a fair and transparent manner. Information about the procedures, who to contact and how, will be made available.

PS6: Biodiversity Conservation and Sustainable Management of Living Natural Resources

General

As part of the PS6 due diligence, MIGA has reviewed the ESIA (2019), the Wetland Rehabilitation and Construction Management Plan (WRP), the Wetland Rehabilitation Plan and Monitoring Protocol (2020), the Groundwater Abstraction note (2022), the Wetland Specialist Scope of Work (for 2022) and additional written and verbal responses from botanical and wetland specialists. This has been supported by screening the Project against the Integrated Biodiversity Assessment Tool and assessing other relevant biodiversity literature.

The Project Area of Influence is flat to slightly undulating with scattered small rural settlements, associated cultivated plots and areas of grassland which are extensively used for grazing, and considered Modified Habitat under PS6. Pockets of Natural Habitat exist in the form of sandstone bedrock outcroppings to the south-east of the site.  The Project site does not overlap with any Protected Areas or internationally recognized sites. 

The seep and valley wetlands link to the wider drainage network, and to varying degrees has been impacted by over grazing, as evidenced by significant gulley erosion. They have also been affected by historic ridge and furrow cultivation and the installation of drains.  Nevertheless, some wetland flora species are still present, and the wetlands provide foraging for a number of water birds and the Southern Bald Ibis Geronticus calvus, assessed as Vulnerable on the IUCN Red List. The wetlands are considered as degraded Natural Habitat. Although this Mesic Highveld Grassland Group 1 freshwater (wetland) ecosystem is threatened, the percentage overlap between the sub-quaternary catchment and total available ecosystem does not reach the quantitative threshold that would trigger Critical Habitat. 

The grassland vegetation type is described as Mesic Highveld Grassland – an Eastern Free State Sandy Grassland which is assessed as Least Concern under the South African Red List of Ecosystems (2021). It is dominated by grasses (Cynodon dactylon and Aristida congesta ssp. Barbicollis) together with some herb species (Helichrysum caespititium and Moraea pallida). Due to the historical agricultural practices and persistent, high grazing pressure the diversity of the grassland flora is very low. No flora species of conservation concern were present, and a number of alien and invasive plant species were recorded on site. The structural and compositional attributes of the vegetation no longer conform to Eastern Free State Sandy Grassland, so this habitat type is now assessed as Modified Habitat.

Faunal diversity in the area was also low; however, a number of threatened bird species were present on site or in the surrounding area, including the Lanner falcon Falco biarmicus and assessed as Vulnerable on the IUCN Red List, and the Blue Korhaan Eupodotis caerulescens, and Ground Woodpecker Geocolaptes olivaceus, both assessed as Near Threatened on the IUCN Red List. None of these species trigger Critical Habitat. The surrounding rocky outcrops supports the Near Threatened Yellow-tufted Pipit Anthus crenatus,

The site covers an area of approximately 66.7 hectares, of which approximately 98 % is Modified Habitat (MH) and the remainder is Natural Habitat (NH). As the majority of the site is modified, the loss of approximately 1 ha of natural grassland is not significant. An evaluation of potential and likely impacts on the avifauna was assessed as being low to moderate significance, the possible exception being the potential for birds to collide with the panels and associated powerlines. This assessment also included cumulative impacts as a result of the proposed development of the neighboring 70MW Ha-Ramarothole Solar Project. Per the ESAP, the PE will be required to develop a bird monitoring program and apply bird deterrent devices to the panel structures to discourage birds from colonizing/colliding with the infrastructure.

Protection and Conservation of Biodiversity

The mitigation hierarchy has been applied to the Project. The original design scenario assessed in the ESIA resulted in the direct impact on the seep and valley wetland units located in the northern part of the site, affecting 7.5 ha in total, which has been reduced to approximately 3 ha. To minimize any further impacts on the wetlands during the construction, the road within the Project, the laydown areas for materials storage, and the inverters and trenches are not located in wetlands.

A Wetland Rehabilitation and Construction Management Plan (WRP) describes detailed mitigation measures that the project will be required to minimize and offset any impacts on the wetlands within the project site, to enhance its functionality and to achieve no net loss in line with PS6 requirements for Natural Habitat. This comprises infilling, stabilizing and rehabilitating headcuts and gulleys, as well as infilling the many drains located across the wetlands.  The WRP also includes a monitoring protocol for the Project. The Project will engage an independent wetland specialist to oversee all construction of infrastructure within the wetland areas, and wetland rehabilitation efforts, for the construction phase per the ESAP. This includes monthly site audits for the duration of the construction phase (scheduled 8 month period), as well as three post wetland construction inspections. The post construction audits must be undertaken at a 3-month interval, over a 9 month period, and shall include two summer audits, including an audit at the end of the first rainy season after the completion of construction, and provide reports on the status of the wetlands. A pre-construction site assessment will be undertaken to reassess the Ecological Importance Sensitivity (EIS) and Present Ecological State (PES) for all wetland units in which wetland construction and rehabilitation actions are to be undertaken, in order to determine a pre-construction baseline, and to re assess and finalize the metrics of loss and gain as per the identified rehabilitation sites (onsite and adjacent there to) in line with the final detailed design, the actions needed and implementation timetable. This will be submitted per the ESAP. The post-construction audits will also include an assessment of PES and EIS of each affected wetland unit. Abstraction of water will not impact the wetlands.  If the rehabilitation and restoration are implemented effectively, the impacts will not significantly contribute to the cumulative loss of wetlands from land use-related impacts that are occurring in the region. 

Alien Invasive Species

Per the ESIA, a 2018 survey conducted identified alien and invasive species recorded in the site and immediate surrounding area. The project will be required to ensure they control and remove all exotic and invasive species from the project site. As per the ESAP, the PE will be required to develop a project specific Alien and Invasive Species Management Plan that details management and control of exotic and invasive alien species in line with MIGA PS6. The plan will be developed by a qualified ecologist and will include the identification, control, and eradication of invasive and exotic plants from the site. The Project will avoid the use/introduction of any invasive alien species and promote use of native species in any site landscaping and restoration.

Management of Ecosystem Services

The area supports a range of provisioning, regulating and cultural ecosystem services. As discussed under PS 1, three nearby villages depend on the wider area for grazing and water resources. There is a natural spring in the area, to the north side the project boundary which is occasionally accessed by the community members for livestock use. The project will ensure that community members and their livestock have access to the spring throughout the project life cycle. Restoration of the wetlands will help restore functionality and is being designed to achieve not net loss. On the loss of grazing land, there will be no additional compensation given that the 36 landowners leased their land willingly to the PE and they will be paid quarterly for the land as detailed in under PS5.

Supply Chains

Material procured from quarries and suppliers, that are not directly owned by the Project Owner or the Contractor, will be evaluated to assess whether they impact Natural Habitat and Modified Habitat per the ESAP.

PS8: Cultural Heritage

In accordance with the National Heritage Act 2006 of Lesotho and MIGA PS8, an independent heritage consultant was appointed to conduct a cultural heritage assessment to determine if the Project would have an impact on any sites, features or objects of cultural heritage significance. During the assessment, one site of high significance was identified due to its complexity (inclusive of Early, Middle and Late Stone Age material) as well as the density of the material on the site. The assessment recommended that a 100 m buffer be implemented the site, and if not implemented a systematic collection of the find should be undertaken. Subsequent to the ESIA, it was identified that the boundary fence and the 33 kV transmission line impinge on the recommended 100 m buffer. The heritage specialist was consulted with regards to this recommendation. Given the limited footprint of this infrastructure, the specialist confirmed that such infrastructure could be installed without the requirement for collection of the find being undertaken.

During construction, the PE will implement the mitigating measures for the site of high significance within the transmission line wayleave per the ESAP. Measures include fencing off a buffer area of 100m around the site with danger tape. If that is not possible and development takes place in this area, other than the boundary fence and the 33 kV transmission line, a valid permit will be sought from the Heritage Commission for an archaeologist to recover as many of the stone tools as possible per the ESAP.

Within the ESIA, it was noted that the Ha Raliemere community has burial sites outside of the Project footprint but close to the main access road to the Project. As these burial sites may be potentially impacted by the construction vehicles that will use this access road, these sites will be fenced off as per the Construction ESMP. Post construction, if the family relatives of the deceased wish, the PE will remove the fence around the burial site per the ESAP.

The PE has developed a Chance Finds Procedure which provide appropriate responses that should be implemented in the event of chance discoveries of heritage resources or other remains at the Project site.

 

The above listed documentation is available electronically as a PDF attachment to this ESRS at www.miga.org.

Local Access of Project Documentation:

Contact Person: Robert Els

Company Name: Scatec

Address: 3 Dock Road, 2nd Floor North Wing, Waterway House, V&A Waterfront, Cape Town, 8001, South Africa

Email: robert.els@scatec.com

Phone: +27212021230

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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