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Salima Solar

$58.58 million
Environmental and Social Review Summary

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

A consortium jointly led by JCM Power Corp. of Canada (JCM) and InfraCo Africa Limited, UK (InfraCo) has been selected by Electrical Supply Corporation of Malawi Limited (ESCOM), the state-owned electricity utility of Malawi by way of competitive tender to develop, construct and operate a 60 MW solar PV project in Salima province of Malawi. The Project Enterprise (PE) JCM Matswani Solar Corp Ltd. is owned by 2 shareholders, jointly referred to as Sponsors: 1) JCM Salima UK Limited, a UK-based SPV ultimately owned by JCM Power International Limited of Cayman Islands (a wholly-owned subsidiary of JCM Power Corp. of Canada and Financierings-Maatschappij voor Ontwikkelingslanden (FMO); 2) InfraCo Africa Limited, UK (InfraCo).

JCM is a Canadian private equity firm established in 2010 by a conglomerate of individuals, funds, and investment firms, with the aim of investing in clean power. JCM develops and operates renewable energy projects in emerging markets. Its recent experience includes projects in Cameroon, Nigeria, Chad and other countries in the African Continent. InfraCo is a private investment company, established in 2004 and funded by the governments of Austria, the Netherlands, Switzerland and the UK. Past projects have mobilized over US$2bn of investment in infrastructure sectors in Sub-Saharan Africa (SSA). The past projects financed by InfraCo include solar plants in Guinea, Zambia, Nigeria and Tanzania.

The Project Site is situated in the central region of Malawi, approximately 30 km from Salima District Boma, in Traditional Authorities (TA) Kalonga. The project falls under Senior Group Village Headman (SGVH) Kanzimbe, Group Village Headman (GVH) Waya, GVH Mayambo and GVH Sadzu.

The plant infrastructure will sit on 168-hectare (ha) land plot, and will include transformers, associated cabling, access roads, a maintenance area, storage, temporary hostels and offices. The Project will be fed directly into the national grid via a 4 km 132 kilovolt (kV) transmission line constructed for the project by the PE, which will require a 57-ha wayleave land from the site to the Nanjoka substation. In total, 225ha of land (including the right of way) will be used by the Project.

SUMEC, has been selected as Engineering, Procurement and Construction (EPC) and Operations and Maintenance (O&M) contractor to build, operate and maintain the Project. SUMEC will also be responsible for construction of the 132-kV transmission line. Once constructed, the line will be handed over to ESCOM.

The plant will be located on existing farmlands and there are few residential areas near the Project and transmission line wayleave. The Project will build temporary accommodations for approximately 30-40 staff during the construction phase. The labor force will be engaged from the local communities which means they will reside in their residences. Site clearing began in December 2018. Due to the heavy rainy season in Malawi, civil works were noticeably slower during January-March. However, civil works, fencing and updated site clearance will commence in March 2019. Construction is anticipated to be completed by October 2019. Once construction is complete, there will be no accommodations on site, however there will be a building dedicated to O&M, which will include storage space, offices, conference rooms and a kitchen.

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

During construction, key E&S risks and impacts include air emissions and noise, Occupational Health and Safety (OHS), community health and safety, influx of construction workers, vegetation removal, and economic displacement of subsistence agricultural land-users. During operations, risks and impacts are expected to include water consumption, erosion and dust generation resulting from controlling for vegetation removal, hazardous waste management, and site security.

While all Performance Standards 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 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 Project is located on existing farms and there are no significant impacts related to biodiversity or ecosystem services, thus PS6 Biodiversity Conservation and Sustainable Management of Living Natural Resources does not apply. 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. Performance Standard 8 does not apply as no findings of cultural or historical value of heritage resources were identified, however the standard chance find procedure requirement will apply.

In addition to the Performance Standards, the World Bank Group (WBG) Environmental, Health and Safety (EHS) General Guidelines; and sector specific guidelines for Electricity Transmission and Distribution apply to this Project.

The following documents were reviewed by MIGA:

In addition to the Project documents above, MIGA conducted due diligence from February 5-9, 2019 which included a site visit to the Kanzimbe village in Salima district, and meetings with JCM Malawi Country Director, Community Liaison Officer, Local Project Coordinator, representatives of local communities affected by the developments, and Electricity Supply Corporation of Malawi Limited (ESCOM).

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 Performance Standards.

PS1: Assessment and Management of Environmental and Social Risks and Impacts

Environmental and Social Assessment and Management System: JCM Power will adapt their global corporate Health, Safety and Environment (HSE) Policy to this project. The policy describes the company’s commitment to the protection of the environment and people, and the safety of its employees. The policy requires compliance with applicable Malawian laws and MIGA’s relevant health, safety and environmental standards. The corporate policy will apply to all aspects of its operations – construction, operations and maintenance; and will be communicated to employees and all stakeholders.

During the project lifetime, the PE, as part of the project specific management plans, will adopt the ESMS developed by JCM, where relevant and applicable during the construction and O&M phases. The ESMS will incorporate the following elements: (i) a policy; (ii) roles and responsibilities for implementation of the ESMS; (iii) identification of risks and impacts; (iv) management programs/procedures for environmental aspects and social related issues (i.e. water management, waste management, OHS); (v) organizational capacity and competency; (vi) emergency preparedness and response; (vii) monitoring and review; (viii) stakeholder engagement plan to manage grievances and communications with communities and others; and (ix) contractor management.

Environmental and Social Assessment: The plant has an ESIA prepared in line with Malawian E&S laws and MIGA’s PS requirements by an independent consultant company, Environmental Resources Management (ERM). The ESIA contains a risk analysis and evaluation of impacts pertinent to the proposed activity including topographical, geotechnical, ecological, cultural heritage, economic development, visual aspects, impacts on agricultural activity, accessibility, soil erosion, land use and property acquisition process.

Management program: The ESMP being developed will define management programs related to risks and impacts identified in the ESIA. JCM has stated that it will ensure that relevant management plans will be integrated in the EPC contracts and sub-contracts, and fully implemented during the construction phase. For the operations phase, JCM will also ensure full implementation of the ESMP. The ESMP being developed will include the procedures for performance measurement and monitoring. Regarding environmental aspects, the ESMP is expected to be developed in line with PS1 requirements.

SUMEC as EPC and O&M contractor will develop and implement an ESMP, in line with the PE’s ESMS, for both the construction and operations phases to manage environmental and social impacts associated with construction and O&M activities. The ESMP will include an organizational structure for E&S management and statements of responsibility and authority and will outline environmental requirements for specific activities which may pose risks on the environment and people. The ESMP will also cover environmental aspects such as resource efficiency and pollution prevention, energy efficiency strategies, water management, waste management, vegetation maintenance, storm water management, exotic weed control, fauna and birds’ management.

Organizational Capacity and Training: JCM is hiring a Health Safety and Environment (HSE) Officer to oversee the implementation of the ESMP, and associated E&S management plans for the construction and operations phase. In addition, a Community Liaison Officer (CLO) has already been hired and will work with the HSE officer to provide complementary and necessary training. The Project will be required to appoint one site based HSE Manager to be supported by, depending on the intensity of construction, an adequate number of qualified site supervisors.

Emergency Preparedness and Response: An emergency response procedure will be prepared as part of the ESMS. The plan will include the following: administration; organization of emergency assembly points; roles and responsibilities; communication system; response procedures; resources; training including drills); checklists; and business continuity and contingency. The procedures and responsibilities for emergency response actions and communication will be clearly defined and available on-site. Emergency response flowcharts with contact numbers will be posted on-site. Firefighting equipment and fire alarms will be regularly tested. JCM will contract an independent provider for medical evacuation, and a medical emergency response plan will be made available on-site. JCM will put in place clear communication lines with the neighboring villages and ESCOM in case of emergencies.

Monitoring and review: The Plant O&M Managers will provide standalone HSE reports to JCM Power monthly. JCM will put in place annual environmental audits and environmental and social reviews to be conducted by an independent consulting firm. Under the ESMP, JCM will develop and implement an HSE monitoring and reporting system on environmental, OHS and social impacts of its operations. Monitoring frequencies and methodology will be reflective of the risks and impacts identified by the ESIA and incorporated into the ESMP; monitoring data will be stored in a centralized database for monthly and annual report production. The Company will disclose monitoring results to provide feedback to affected communities on at least an annual basis in relation to any impacts affecting them and associated mitigation measures. The regional branch of ESCOM will conduct regular and ad-hoc monitoring activities in line with the applicable guidelines of the Environmental Affairs Department (EAD).

Organizational Capacity and Competency: During all phases of the project, JCM will have an Officer on site. This Officer will supervise and coordinate all HSE activities of the different sub-contractors. JCM will also set up an HSE team to support the two (2) Contractor’s HSE site supervisors to ensure that mitigation measures of ESMPs are effectively implemented. This team will be composed of an HSE Manager, and a Community Liaison Officer responsible for managing grievances and oversee implementation of the Livelihood Restoration Plan. Moreover, the EPC contractor will be responsible to ensure training (i.e. through HSE methodology function such as tool box talk).

PS2: Labor and Working Conditions

During construction, it is anticipated that there will be approximately 200 workers (both casual and skilled) on the Project site across the nine-month construction phase. The workers will be responsible for site preparation and construction will involve the clearance of vegetation, installation of fencing and levelling of the site and preliminary earthworks. The site will be marked out, safety and security fencing installed, the access road will be upgraded, and internal site access tracks will be constructed.

During operations, the solar PV power plant will be operated on a 24 hour, 7 days a week basis with 20 on site workers. Most workers will be employed by SUMEC as the EPC and O&M Contractor. Key operational activities will include: cleaning of the modules; vegetation management for under and around the modules; maintenance of all Project components; site security monitoring, in addition there will be security personnel who will be trained on the Voluntary Principles for Security and Human Rights.

Human Resources Policies and Procedures: JCM will adhere to the Malawian Employment Act (2000) and Labor Relations Act (1996). JCM has a global Human Resources Policy in place which will be adapted to reflect the requirements of the Malawian legislation. It will include the recruitment, dismissal, performance appraisal, equal opportunity and non-discrimination, rights to collective bargaining, commitment to health & safety at work and compensation systems. Individual job contracts for JCM staff and will incorporate the requirements of national HR-regulations as well as the requirements of PS2. SUMEC will be required to adhere to JCM’s HR policy and procedures, and these requirements will also flow down to sub-contractors. JCM will have a mechanism in place to ensure that the Human Resources Policy and Procedures for the EPC and O&M provider and subcontractors are consistent with its own HR documents and procedures.

Workers’ Organization: JCM will follow the requirements of the Malawi Employment Act (2000) and Labor Relations Act (1996) which protects employees’ rights to freedom of association and collective bargaining in line with the requirements of PS2.

Non-Discrimination and Equal Opportunity: JCM has committed to the principles of employment equity, equal opportunities and empowerment, regardless of gender, race, color or creed or medical status. JCM will include in their HR Policies and Procedures a formal policy on non-discrimination and equal opportunity. The policy will cover all aspects of the Project, and such requirement will contractually pass down to all third-parties, including contractors.

Grievance Mechanism: An employee grievance mechanism for operations will be integrated in ESMP and Health and Safety Management system. This will be compliant with the Malawian labor legislation and the requirements of MIGA’s PS2. JCM Power will put in a place a grievance redress instrument and reporting form which will be communicated to its personnel during induction. Serious cases will be investigated by an JCM senior management in Malawi.

Occupational Health and Safety (OHS): The OHS main risks and impacts include heat exposure, traffic safety, exposure to welding light and fumes, work at height, electrocution, and potential for fires and/or explosions resulting from ignition of flammable materials or gases. JCM will develop an HSE Management System which will contain procedures for site-specific risk assessment. High-voltage (HV) works permits will have to be cleared by the Control Room at the ESCOM Central region office in Lilongwe. JCM will ensure that the HSE documentation is available on site and that the site staff are trained on the full range of HSE procedures.

A system will be developed for reporting incidents, accidents and near misses. Major accidents and incidents will be reported to the Department of Labor and the Department of Environmental Affairs. There will be a procedure for accident/ incident investigation. Investigation results will be used for learning and training purposes. Near-miss reporting figures will also be made a part of the Key Performance Indicators (KPIs) which are regularly monitored and reviewed by JCM Power Management. Internal reporting will include monthly reporting to JCM Global Management in HQ in Canada.

Visitors and employees will be provided with HSE induction, and JCM will maintain an induction log. Site employees and visitors will be provided with appropriate PPE.

HSE responsibility on-site falls under the HSE officer and SUMEC’s plant supervisor. An HSE site representative for JCM Power is being recruited and 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.

Workers Engaged by Third Parties: Contractors and third parties involved during operations include security personnel, sanitation services and sewage removers who come once a month, a waste management and collection company, and a vegetation control service that comes once per annum. As part of the ESMS, JCM will develop a contractor management plan, which will include procedures and a template for standard contractual obligations to ensure that contractors’ labor and working conditions comply with the requirements of PS2 and Malawian laws, including consideration for grievance mechanisms for third party workers and fair working conditions.

As stated above, JCM will include HSE provisions into the EPC and O&M contracts and contracts of other sub-contractors providing services to the Company’s operations. These provisions will include as a minimum: compliance with labor legislation, terms of OHS management, and access to a workers’ grievance mechanism including review and response to anonymous complaints. JCM will monitor third-party compliance with approved HSE requirements.

Supply chain. JCM Power will develop requirements and engage in dialogue with suppliers and sub-contractors. To ensure that suppliers meet international standards, JCM Power will visit selected suppliers to monitor performance regarding quality, HSE, labor conditions and environmental management.

Worker’s Accommodation: There will be temporary housing of workers on the site during construction stage. The project intends to build workers accommodations at the site and it will ensure these accommodations are compliant with MIGA’s PS2 requirements as well as The International Finance Corporation (IFC) guidance note on Workers' Accommodation: Processes and Standards. All unskilled workers, including security personnel, live in the nearby villages and leave for home at the end of their shifts.

Training: JCM will develop a training plan. Training for direct and indirect workers will be covered in the Human Resources procedure. Induction training on the Human Resources Policy and Procedures and basic safety awareness training will be provided to all newly hired workers. Other types of technical skills training will be identified for staff on an as-need basis.

PS3: Resource Efficiency and Pollution Prevention

During construction and operations, the main issues relate to air emissions, water consumption, pollution prevention, solid waste management, and hazardous material management. Mitigation measures will be included in the Plant’s ESMP and are expected to be in accordance with MIGA’s PSs.

Greenhouse Gases: As this is a solar project, the Greenhouse Gas (GHG) emissions associated with the operations phase of the project are expected to be minimal. JCM power will be required to quantify and report the CO2-equivalent emissions as required under MIGA’s PS3. Based on JCM’s Power 2018 Sustainability Report the company’s power plants in operations globally resulted in avoiding more than 106,070 metric tons of carbon dioxide emissions in 2018.

Air Emissions: Due to the rural nature of the Project area there are no existing continuous air emissions near the Project site. Occasional air emissions may result from minimal burning or clearing activities occurring in and around the Project area. There are residential communities in the immediate vicinity of the Project site.

During construction, temporary air emissions will be associated with the following activities: combustion emissions from the operation of supply vehicles construction machinery and generators; particulate (dust) emissions from exposed areas, earthmoving activities and ground preparation of the Project site and transmission line wayleave; traffic and movement of vehicles over open ground and on unpaved roads; and material stockpiles from clearance and preparation activities; and welding operations, if applicable. Air Emissions during construction will vary in magnitude, frequency and duration based on the various construction activities required.

Water consumption: During construction, according to the ESIA, it is estimated that 7,000 cubic meters (m3) maximum of groundwater will be required (approximately 26 m3/day). Uses will include construction activities such as concrete mixing, dust suppression and sanitary facilities for workers. When an abstraction borehole will be drilled onsite stringent evaluation/assessment and permitting processes will be followed. It is expected, that there will be one abstraction borehole on site. Depending on the final location of the borehole and local aquifer conditions, the Project will assess whether the abstracted quantity of water required will have any potential impacts on other groundwater users/community wells in Kanzimbe and Mayambo villages. If any impacts are identified the Project will follow up with implementation of appropriate water management plan; potentially including identifying alternative water resources for the local communities.

During operations, water usage during this phase will include domestic use and panel cleaning. It is estimated that up to 4000 m3of water per annum will be required for panel cleaning during the dry season. Water will also be required for onsite staff which is approximately 30 liters per worker per day. All water for the Project is expected to be obtained from the borehole within the facility.

Energy consumption: During construction, electricity will be provided by diesel powered generators. It is estimated that 5 x 24kW generators running at ¾ for 10 hours a day, 5 days a week for 36 weeks will satisfy the electricity requirements of the office trailers during construction. Therefore, the estimated consumption of fuel during construction for office trailers is 48,6000L. It is estimated that 10 x 8kW generators running at ¾ for 6 hours a day, 5 days a week for 36 weeks will satisfy the electricity requirements of the operations of equipment during construction. Therefore, the estimated consumption of fuel during construction for equipment use is 18,360L.

During operations, the facility will supply its own electricity, and electricity will be purchased from ESCOM when the plant is not generating electricity. There will also be back-up diesel-powered generators on site in case there is no supply from the facility or the grid. It is estimated that 1 x 200kW generator running for 10 days a year for 8 hours at full load will satisfy the electricity requirements during operations, specifically for lighting of offices and other administrative functions. Therefore, the estimated consumption of fuel during operations is 4,280L/year.

Pollution Prevention: A Pollution and Prevention Plan will be developed in line with MIGA’s PS3. The Plan will include measures on the use of proper equipment, vehicle and roads maintenance and safety, timely dust suppression measures, and speed restrictions among others. The project will develop a monitoring program which will cover all emissions.

Solid Waste Management: Site-specific waste management plan will be developed for the plant. During construction, wastes will comprise of general domestic waste including sanitary and food waste, office waste and organic material. Waste will be separated at the source, and labelled bins will be provided within the Plant for storage of the various categories. Staff will be trained in proper waste management practices and the importance of implementing them. Cleaning staff will be trained in safe handling and storage of waste and hazardous materials. Staff will also be provided with adequate Personal Protective Equipment (PPE). During construction, all hazardous waste will be removed by the EPC contractor and safely disposed of in a licensed facility. JCM will investigate the possibility of recycling non-hazardous waste. Non-recyclable non-hazardous solid waste will be sent to the Salima waste site. No effluents are expected to be produced from operations except for the normal sewage from operations and run off from panel cleaning activities.

During operations, it is estimated that 50 kg of domestic waste will be produced weekly by the 20-person workforce. Industrial waste production will be occasional (i.e. solar panels, electrical waste) as they will only require disposal if they become damaged. The procedure should include: (a) detailed evaluation of available and viable options to manage broken/damaged panels during operations, (b) operational and end-of-life panels at the end of the concession/during project decommissioning; (c) quantitative evaluation of amount of waste that will be produced during operations and during decommissioning; and (d) actions for proper management of waste. Waste disposal log and permits will be made available on-site. Domestic waste, inert waste (rubble, spoil), recyclables (plastics, paper, and metals) will be sorted on site and disposed of by a licensed waste collector for recycling and disposal as required by local regulation.

A detailed decommissioning and rehabilitation plan will be developed prior to decommissioning the solar PV plant and associated infrastructure. 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. The decommissioning activities will be like construction activities. JCM Power will thus have to manage construction phase impacts per the PSs during decommissioning. Management actions will need to focus on the rehabilitation of disturbed areas and the removal of infrastructure.

Wastewater: The EPC contractor will manage construction wastewater. Any hazardous wastewater will be stored on site and treated (if required) before disposal. During operations, there will be minimal sewage from sanitary facilities. These facilities will operate on a septic tank system and JCM will arrange for safe disposal of waste from the septic tank. Run-off from the panel cleaning or storm water are not expected to be contaminated and adequate drainage of the site will be a design requirement for the Project Site. Wastewater from construction activities include the following: temporary sanitary facilities; storm water; and drainage over potentially contaminated areas (i.e. concrete batching/mixing areas and equipment storing areas). During operations, wastewater will be created from onsite sanitary facilities and run off from panel cleaning activities.

Hazardous Materials Management: The Project will develop a Hazardous Spill Response Plan (HSRP) and maintain spill clean-up and response capability adequate for addressing spills for all phases of the Project. All spills will be immediately contained and cleaned up. Contaminated areas will be remediated. There will be a small amount of hazardous materials located on-site. They will include fuel (diesel by-products and petrol), which will be generated from the transport of goods and personnel, generators and heavy construction equipment oil and lubricants and paints which will be segregated and labeled. Oil that needs to be replaced will be recycled, if possible, or safely stored and removed from the site and correctly disposed. These materials will be stored in a secured cabinet, locked to prevent unauthorized access. The necessary prohibition and warning signs will be posted. Material safety datasheets will be made available for all materials present on-site. During operations, the quantities of hazardous materials will be minimal, and the materials are expected to be managed in a suitable manner to avoid community exposure to these materials.

PS4: Community Health, Safety and Security

The plant is located on existing farmland, with no communities or settlements near the plant. The closest residents of the three villages in the KVG in Salima district are about 75 meters away from the plant.

Community Health and Safety: The project site is in a rural area with communities in the immediate vicinity, and the potential impacts on community health and safety are limited. JCM Power in collaboration with SUMEC will develop a Traffic Management Plan in line with the requirements of MIGA’s PSs for a) construction phase and b) operations phase. During construction traffic will be limited to the transportation of construction materials. Develop and implement safe driver and transport safety vehicle procedures, including training sessions for its own and third-party haulage contractors during construction. Unskilled labor will come from the surrounding villages and employees will use their own sources of transportation, mainly bicycles or may walk to the project site.

Community Exposure to Disease: The Project will develop a Community Health and Safety Plan (including STI and malaria prevention) to mitigate for community exposure to disease at the plant. The number of employees and contractors on site is expected to be small and the nature of operations does not imply potential impacts to areas outside the plant. JCM will implement worker’s health programs to screen the health of workers. Such information is not used in discriminatory manner and will not exclude workers from employment opportunities. JCM will initiate health programs in surrounding villages on Sexually Transmitted Diseases (STDs), HIV/AIDS prevention and alcohol abuse.

Emergency Preparedness and Response: As indicated under PS1, JCM will develop and implement an EPRP which will cover the procedures for informing stakeholders and responding to emergencies and will be in according with MIGA’s PS requirements.

Security Arrangements: Site security will be managed by a professional private security firm who will provide trained unarmed security personnel. JCM will ensure that the security contractor operates in a manner which meets the requirements of PS4. JCM will make reasonable inquiries to ensure that those providing security are not implicated in past abuses; 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. JCM will not sanction any use of force except when used for preventive and defensive purposes in proportion to the nature and extent of the threat. A Security Management Plan will be developed, which will include a training module for security staff. JCM will update their grievance mechanism for nearby communities to express concerns about the security arrangements and acts by security personnel. The site will be fenced and public access to the solar plant will be restricted to authorized personnel. The Project is expected to be guided by the principles of good international practice, as it pertains to hiring, rules of conduct, training, equipping, and monitoring of security workers, and by applicable law.

PS 5 Land Acquisition and Involuntary Resettlement

The project resulted in land acquisition which led to economic displacement of land users, primarily comprising of subsistence farmers. The Project Affected Persons (PAPs) impacted by the project footprint (power plant and wayleave area) are residents from 14 villages, these are Kanzimbe 1, Kanzimbe 2, Jeputala, Malezi, Kamchepera, Mayambo, Njoka, Menyako, Chishasha, Waya 1, SantheThangani, Chikwakwa, and Sadzu. The land acquisition for the Project was undertaken in two phases. Phase I refers to an initial 80 ha plot of land and Phase II refers to additional 88 ha plot of land. The land acquisition process for Phase I was a Government-led process, led by the Salima District Office and undertaken at the end of 2017, prior to the development of the ESIA. 72 people were compensated during Phase I of land acquisition: 50 people in Kanzimbe Village (24 males and 26 females) and 22 people in Mayambo Village (8 males and 14 females). For Phase II, a total of 166 people were impacted (77 males and 89 females). The Phase II land acquisition was completed in February 2019 after the completion of the ESIA.

Land users in Project area have land allocated under the customary land tenure system, which has generally been inherited. However, due to the land acquisition process undertaken by the Project, some farmers in Kanzimbe and Mayambo have already been compensated and have moved to alternative areas within the Kanzimbe Group Village. Alternative land was identified and provided for those impacted by Phase II of the land acquisition process as part of the Livelihood Restoration Plan (LRP). Generally, there are few conflicts resulting regarding land. However, land disputes that do arise are resolved through the GVH and TA.

To mitigate the impacts of economic displacement of PAPs, an LRP was developed for Phase 1 and Phase 2. The LRP is being updated and finalized in line with Malawian law, MIGA’s PS5 requirements and the international E&S consultant’s recommendations will be implemented by the PE. The LRP will set out the extent and scale of displacement impacts, engagement activities related to land acquisition, eligibility and entitlements of PAPs and the implementation, monitoring and evaluation requirements of economic displacement impacts on land owners and farmers. These concerns will be addressed through compensation and livelihood restoration measures proposed in the LRP.

In accordance with the provision set forth in PS5, the Project will be expected to achieve outcomes that are consistent with PS5. This may include additional compensation for lost assets, and additional efforts to restore lost livelihoods, if applicable. After completion of LRP mitigation measures, the Project will commission an external completion audit of the LRP to assess whether the provisions have been met and implement supplemental measures.

As described in the LRP, the 225ha (including the right of way) affected by the establishment of the plant were actively farmed by 238 farmers, mainly to produce seasonal crops such as groundnuts, millet, sorghum, maize, beans, water melon, soya, cotton, tobacco and hibiscus. Households in the Project area mainly rely on subsistence farming to produce food for household consumption, with a small number of households generating a small income from produced crops. Livestock rearing of cattle, goats, pigs and poultry is common. After harvesting, livestock was normally allowed to graze on crop residue as an additional source of fodder. Trees, mostly mango and some exotic and indigenous species occurred on site. When the E&S due diligence was conducted in early- February, the project site had been cleared.

Environmental Permitting Process: The project also has an Implementation Agreement with ESCOM, an Environmental License from the EAD, and a Generation License from the Malawi Energy Regulatory Authority (MERA).

The plant was granted an Environmental License by EAD in November 2018 valid until the expiration of the PPA. Other licenses and permits granted to the Projects include: Granting of the Generation License, Construction License, Certificate of Incorporation, Taxpayer Identification Number and, Business License.

Stakeholder Engagement: During the preparation of the ESIA, public consultations were held in February and March 2018. Most concerns were related to community health and safety during construction, employment opportunities, influx of workers and impacts on communities especially vulnerable individuals such as young girls, ongoing information about the project, occupational health and safety, danger of electrical equipment, training, and provision of electricity as a project benefit.

During the LRP development process, consultations with affected people were held in February 2018. Main concerns were related to the loss of land for subsistence farming, livelihood restoration, concerns about equal access to employment opportunities, need to address vulnerability of people, and food security.

At the Group level, JCM has a procedure for external communications that includes methods to (i) receive and register external communications and complaints from the public; (ii) screen and assess the issues raised and determine how to address them; (iii) provide, track, and document responses, if any; and (iv) adjust the management program, as appropriate. At the project level, a grievance committee was put in place. The Grievance Committee consists of 12 members reflecting a cross-section of the community i.e. Chiefs, women, religious leaders, youth and disabled members of communities, PAPs representatives etc.

JCM will update and finalize the Stakeholder Engagement Plan to align with MIGA’s PSs which should include the following elements: engagement principles, objectives and criteria; requisites and regulations; summary of any previous engagement activities including any documented evidence (i.e. agreements, minutes of meetings); identification, characterization and priority of stakeholders, focusing on those directly affected and identifying any vulnerable individuals or groups; engagement program including indication of how interactions should be formalized (i.e. agreements, acknowledgment of receipt of information); description of grievance redress mechanisms; list of time-bound activities; and resources and responsibilities.

A Corporate Social Responsibility (CSR) plan has been developed by JCM. The CSR will focus on potential investments in agriculture, water and sanitation, and electrification. The Community Liaison Officer (CLO) who has been hired by the PE, will provide a link between contractors and communities on questions related to workforce and employment, the CLO currently works with the project to review grievances, compensation implementation, identifying community needs and suitable support programs for the CSR.

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

The above listed documentation is available electronically as a PDF attachment to this ESRS at  

Local Access of Project Documentation:

Contact Person: Mr. Jonas Sani
Company Name: JCM Power Corp.
Address: Plot 608, Area 12, Lilongwe, Malawi
Phone: +265 99 9415 049