Tulu Moye Geothermal Operations Plc

This ESRS was first disclosed in September 2018(click here to view) , and revisions were made in July 2020 to provide an update in the project status and to summarize documents (e.g. additional studies and management plans) that have been prepared since September 2018. While the updates refine and provide additional detail to the information that was presented in the previous disclosure, the information presented is materially consistent with that disclosed in 2018.

MIGA has been approached by Meridiam on behalf of Tulu Moye SAS (“TM SAS”) to cover TM SAS’s equity investment and shareholder loans to Tulu Moye Geothermal Operations Plc (“TMGO”). TM SAS is a company established by Meridiam and Reykjavik Geothermal (“RG”) to finance the development of the Tulu Moye Geothermal Project (“the Project”). The Project is being developed by TMGO, a locally incorporated special purpose vehicle (“SPV”). It involves the design, construction, operation and maintenance of a 150-megawatt (MW) steam and brine geothermal power plant. The Project will be implemented in two phases with a first phase of 50 MW capacity, followed by 100MW developed over a period of 5 years. It is currently planned that the first 50 MW is expected to be operational by 2023 and the full 150 MW be online by mid-2025 The proposed MIGA guarantee will cover the exploration phase and the development of phase 1 only; however, as exploration and phase 1 development intend to lead to development of subsequent phases, this ESRS considers the full 150 MW. The Project is currently at the early stages of development of phase 1 (i.e. the potential for geothermal resources has been identified through surface exploration; the first two well pad sites have been established, three additional well pad sites have been identified and a tentative plant site has been proposed). The exact locations of wells, additional well pads, pipelines and the power plant will be confirmed in the detailed engineering design phase of the Project, following exploration drilling.

In addition to the power plant, the Project will include exploration and production drilling, establishment of well pads, access roads, water supply, quarries and a collection pipeline system. The Project will also require construction of a transmission line to connect the Project with the national grid, which will be considered an associated facility of the Project. The design and route alignment of the transmission line are currently being finalized by Ethiopia Electric Power (EEP), the sole offtaker of energy from the Project. Exploration drilling will initially start from the first 2 well pads (each 10,147m2) with an average of 3 wells per well pad. Well pad sites include storage facilities for water, mud, fuel and chemicals, pipes, and, accommodation and offices. Wells are expected to be between 1,500 m and 3,500 m deep. Lined ponds have been developed for the first 2 well pads and will be developed at each additional well pad to collect drilling fluids and geothermal brine. If an exploration well is sufficiently productive, it will become a production well. It is estimated that approximately 10 production and two reinjection wells will be drilled for phase 1 (50 MW), and approximately 20 production and 4 reinjection wells will be required for 100 MW of energy. Assuming 3 wells per well pad, it is estimated that 10 -15 well pads will be required for the 150 MW plant. It is estimated that the exploration phase (2 wells pads, separator plant and cooling tower) will require approximately 2.5 ha (25,000 m2) of land – approximately 1.5 ha for well pads and 1 ha for the separator plant and cooling tower. Additional land will also be required for access roads. Approximately 15 ha will be required for the 100 MW plant and ancillary facilities (i.e. lay-down area, offices, accommodation).  

The Project is located approximately 130 km south east of Addis Ababa in the Tulu Moye, Tero Desta and Anole kebeles of the Hitosa Woreda (district), Arsi zone, Oromia Regional State. Exploration drilling is focused on the Gnaro lava field between Lake Koka (to the north) and Lake Ziway (to the south). The Gnaro lava field is not suitable for cultivation, and there are no settlements in the lava field, which is primarily vegetated with trees and shrubs. The area adjacent to the Gnaro lava field is sparsely populated and primarily used for agriculture and livestock grazing. The closest town, Iteya, is located approximately 15 km east of the Project area. 

During exploration, approximately 170 people will be employed – 70 for civil works and 100 for drilling. During plant construction, the site workforce is expected to reach a maximum of 400 people. Exploration workforce will be housed in camps near the drilling sites. During plant construction, a worker camp will be established near the construction site. Approximately 45 employees will be required for operations. In October 2019, TMGO engaged Kenya Generation and Electricity Company PLC (“KenGen”) as the drilling contractor, and KenGen mobilized to site to begin exploration drilling in March 2020.  TMGO has also appointed two specialized technical advisors to act as Owner’s Engineers: Mannvit-Verkis and Power Engineers. The construction phase of the Project will be carried out under one Engineering, Procurement and Construction (EPC) contract, including the steam gathering and power generation systems and all civil works. The EPC contractor will be selected through an international competitive process, which is expected to be completed by the end of 2020.

The Project is a Category A under MIGA’s Policy on Environmental and Social Sustainability (2013) because it has potentially significant adverse environmental and social (“E&S”) risks and impacts. The most significant E&S risks include: land acquisition and involuntary resettlement (mostly economic, but potentially physical, too); impact on water resources (water use and effluent discharge); waste generation (e.g. drill cuttings/ fluids); impacts on biodiversity; air, noise and nuisance odor emissions; and occupational and community health and safety (e.g. well blow-outs and pipeline failure). Additional E&S impacts include the potential cumulative impacts associated with the development of all four phases of the Project.

While all Performance Standards are applicable to this investment, current information indicates that the investment 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
• PS6:  Biodiversity Conservation and Sustainable Management of Living Natural Resource

The area affected by the Project is predominately occupied by the Oromo ethnic group. Approximately 27 Oromo sub-groups have been identified in the Project area. None of these sub-groups (or the Oromo ethnic group) are considered ‘Indigenous Peoples’ as defined by PS7, and therefore PS7 does not apply. 

As part of the ESIA process, culturally significant sites in the Project area were mapped, and potential infrastructure sites have been selected to avoid disturbance on culturally significant sites. A ‘Chance Find Procedure’ has been prepared and will be implemented during exploration and construction activities.

World Bank Group (WBG) Environmental, Health and Safety (EHS) General Guidelines, Guidelines for Geothermal Power Generation and Guidelines for Electricity Transmission and Distribution will also apply to this Project.

The following documents were reviewed by MIGA:

• Development of a 150 MW Geothermal Power Station at Tulu Moye, Ethiopia: Initial 50 MW Phase 1. Project Information Memorandum. Delphos International. April 2020.
• Environmental and Social Impact Assessment for Water Supply Alternatives. Stantec. March 2020.
• TMGO Environmental and Social Management System Manual. March 2020.
• Tulu Moye Geothermal Project Stakeholder Engagement Plan. Version 3. GIBB International and Reykjavik Geothermal. March 2020.
• Tulu Moye Geothermal Development Project – Biodiversity Compensation Plan. ERM. February 2020.
• Tulu Moye Geothermal Community Development Initiative Strategy 2020 – 2022 Phase 1 COD. TMGO. January 2020.
• Tulu Moye Geothermal Development Project – Livelihoods Restoration Plan. ERM. October 2019.
• Geothermal Risk Mitigation Facility for Eastern Africa (GRMF). Review against IFC Performance Standards for the Tulu Moye Geothermal Prospect, Ethiopia. ERM. June 2019.
• Tulu Moye Geothermal Development Project – Phase 1: Environmental and Social Impact Assessment (Parts I – III). VSO Consulting and TS Environmental. November 2017
• Gap Analysis Review against IFC Performance Standards for the Tulu Moye Geothermal Project in Ethiopia. ERM. September 2017
• Environmental Baseline Study Report for Tulu Moye Geothermal Project. GIBB International. March 2016.
• Places of Social & Cultural Significance in and around the Gnaro Lava Field. Reykjavik Geothermal. July 2017

MIGA’s review also included a site visit in June 2018. During the visit, the team visited the Project area (including the proposed plant site and well pad sites) and had meetings with TMGO, representatives of local communities and relevant Government authorities (i.e. Hitosa Woreda, Oromia Region, Environment and Climate Change Directorate of the Ministry of Water, Irrigation and Energy). ARUP, the Lenders’ Environmental and Social Consultant undertook a due diligence review in June 2020, which included virtual meetings with the international team and a site visit and stakeholder consultation by local consultants.

MIGA’s due diligence review considered the environmental and social management planning process and documentation for the Project, and identified gaps between these and MIGA’s E&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 Environmental and Social Review Summary (“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

Policy:

TMGO’s Environmental and Social Policy Statement (issued in October 2018) defines the environmental and social commitments of the company and underlines the principles that the project and its contractors need to follow in construction and operations of the project. The Project also has a Human Resource Policy, Resettlement Policy Framework and Workplace HIV and AIDS Policy.

KenGen has an overarching environmental and sustainability policy, which states the company’s commitment to consistently identify and manage environmental and social risks in line with good international industry practices.

Identification of Risks and Impacts:

An Environmental and Social Impact Assessment (“ESIA”) report has been prepared, which describes exploration drilling and production drilling, and the construction of well pads, access roads, water supply, quarries, pipelines, and up to 150 MW power station. While the locations of the well pads and power plant have been identified, the exact locations of the wells, flowlines, access roads and water supply will be determined following the exploration drilling and detailed engineering design phases of the Project. The existing ESIA will be updated once the detailed design information is available and for expansion of the plant beyond 150 MW. The ESIA provides environmental and social criteria (e.g. noise, air emissions, odor, land use, cultural heritage), to guide selection of sites for Project infrastructure (for the 150 MW and beyond) to minimize environmental and social impact. This selection criteria have already been applied to identify the existing and proposed well pad sites and the proposed plant site, all of which have been sited to avoid physical and economic displacement.

The ESIA process started in 2016 with the preparation of comprehensive environmental and social baseline studies, an early stakeholder engagement plan and a resettlement policy framework. The initial draft (May 2016) was published for stakeholder consultation. Following consultation, a revised ESIA was prepared. The revised ESIA was then reviewed against the IFC Performance Standards by an independent consultant. Gaps identified included the need for further social baseline work to confirm the absence of ‘Indigenous Peoples’ as defined by PS7 and a rapid biodiversity assessment to map habitats in the Project area according to PS6 definitions – modified, natural, critical. These studies were undertaken, and the ESIA was updated again to reflect the findings, and then submitted to the Government (Environment and Climate Change Directorate within the Ministry of Water, Irrigation and Energy) in April 2018. The Government provided comment, and the ESIA and ESMP were updated to address the comments. The ESIA was then approved, and TMGO received the Environmental Clearance Certificate in June 2018. Additional approvals will be required for expansion of the Project beyond 150 MW. Subsequently, TMGO engaged an international consultant (Stantec) to complete an Environmental and Social Impact Assessment for Water Supply Alternatives. This study was completed in March 2020.

While the ESIA focuses on the development of a plant with up to 100 MW installed capacity, it also identifies two primary cumulative impacts associated with the development of all four phases of the Project (up to 520 MW installed capacity): economic and physical displacement, and habitat loss and degradation (associated with Project activity, noise and air emissions). The extent of these cumulative impacts cannot be quantified at this stage, and TMGO indicates that a more detailed cumulative assessment will be undertaken with each progressive phase (ESAP Action). Baseline studies undertaken for the ESIA cover the entire Project area (including area for the development of all four phases).  The ESIA will need to be updated following exploration, once the final design is known and as subsequent phases are developed (ESAP Action), the ESIA that has been undertaken thus far is consistent with the requirements of PS1 for this stage of the Project.

The Project will also require the construction of a transmission line to connect the plant to the national grid. This transmission line, which will be constructed by Ethiopian Electric Power (EEP), will be considered an associated facility (as defined by PS1) of the Project. The design (i.e. capacity and pole type) and route alignment of the transmission line have yet to be determined. As the line could result in physical and economic displacement, land clearance and habitat destruction; and impact on birds in the Project area, a full ESIA will be undertaken by EEP prior to construction (ESAP Action).

Management Programs:

RG implements an integrated management system that is consistent with the requirements of ISO 9001 (Quality Management), ISO 26000 (Social Responsibility), OHSAS 18001 (Health and Safety Management) and ISO 14001 (Environmental Management). Based on the RG system, TMGO has developed its own integrated management system (quality, environment, health and safety and social responsibility). The system was first developed in 2018 and was updated in March 2020.

A framework for an Environmental and Social Management Plan (“ESMP”) was prepared as part of the ESIA, which describe the roles, resources and responsibilities for ESMP implementation. The ESMP also provides the Environment, Health and Safety Policies of RG. TMGO will prepare their own policies as part of the integrated management system. Under the framework ESMP, a series of site-specific management plans (e.g. noise, air quality, biodiversity) have been prepared.

TMGO has also prepared a ‘Contractor Management Plan’ (July 2018) to guide overall management of the contractors and any sub-contractors. The Contractor Management Plan specifies the environment, health and safety requirements for contractors, including requirements for monitoring and reporting. It also includes a mechanism to address non-compliances.

KenGen has prepared an Environmental Management Plan (EMP) for the Project (October 2019), which establishes a framework for managing potential negative environmental and social impacts associated with Tulu Moye Drilling works in line with the requirements of the TMGO ESMP and the PS.

The EPC contractor will be required to prepare policies and an ESMP consistent with the overall project policies and site specific ESMPs (ESAP Action). Prior to operations, the integrated management systems and ESMP will be adapted for the operational phase (ESAP Action).

Organizational Capacity and Competency:

TMGO has engaged an E&S Manager to oversee the implementation of the environmental components of the integrated management systems and ESMP. The E&S Manager has previous experience in geothermal energy and with implementing an IFC Performance Standard-compliant environmental and social management system. The E&S Manager is supported by a Community Liaison Officer (“CLO”), a Community Relations and Investment Coordinator and a Contractor Liaison. This is the appropriate level of environmental, health and safety staff at this stage, but as the Project proceeds to exploration and construction, additional environment, health and safety officers will need to be engaged. RG also has the technical capacity and environment, health and safety expertise to support TMGO.

KenGen has two Environment, Health and Safety (EHS) Officers appointed to the Project who are responsible for ensuring the day-to-day implementation of the EMP. The EPC contract will require the contractor to engage appropriate EHS staff for the project.

Emergency Preparedness and Response:

An Emergency Preparedness and Response Plan (“EPRP”) has been prepared by TMGO (August 2019) as part of their integrated management system.KenGen has prepared and is implementing an EPRP for drilling, and the EPC contractor will be required to have their own EPRP, which is based on the TMGO EPRP. The EPRP includes procedures for incident and emergency management, call out and mobilization, line of responsibilities and roles, interfaces with external organizations and institutions, contingency plans for specific scenarios and a communications directory. The EPRP also includes consideration of worker and public injuries, property damage, fire, environmental damage and natural disasters.

Monitoring and Review:

A monitoring plan has also been prepared, which identifies the responsible parties, roles and procedures for implementing the monitoring program (i.e. frequency, methodologies, locations / number of monitoring sites). KenGen’s EMP also includes monitoring and reporting requirements, including key performance indicators to monitor environmental compliance.  

Reporting commitments are specified in the TMGO integrated management system. During exploration and construction, reporting will be at least monthly, and will include: summary of exploration activities; number of contractors employed; number of environment, health and safety incidents; description of environment, health and safety incidents (if any), waste generation (including amount of drill cuttings generated and disposed of during the month); water use; summary of community engagement activities and grievance register. Regular internal audits will also be undertaken by the Environmental and Social Manager, Owners Engineer and health and safety consultant. An internal procedure for Environmental and Social Monitoring and Audit (January 2020) has been prepared to guide monitoring activities. The Project will also be required to provide MIGA with an Annual Environmental and Social Monitoring Report (“AMR”).

Stakeholder Engagement

Stakeholder engagement was initially carried out with national and local (regional, Woreda, Kebele) government officials in 2008. Meetings were also held with local farmers prior to the geoscience (i.e. geology, geochemistry and geophysics) field work, and with non-governmental organizations and civil society organizations operating in the Woredas affected by the Project (e.g. USAID / Power Africa, SOS Children’s Villages).

Engagement with the potentially affected communities was undertaken in as part of the ESIA process. Initially, engagement started with baseline socio-economic surveys at a sample of 742 households. In May and June 2015, consultation on the draft ESIA was undertaken with approximately 40 meetings held, including public meetings, meetings with Kebele leadership, women’s groups and Zone and Woreda officials. Prior to each meeting, a non-technical summary and comment forms in English, Amharic and Oromiffa were distributed. The full Draft ESIA and Stakeholder Engagement Plan (“SEP”) were also made available (in English) to all participants. After the ESIA was updated, an additional round of consultation meetings was undertaken in June 2017. These meetings provided information on project status, presented the updated ESIA and the proposed Grievance Redress Mechanism. The SEP was then updated in August 2017 to cover the feasibility phase, which includes civil work, pipelines, exploration and construction. Implementation of the stakeholder engagement has been ongoing from 2017 to the present, and additional consultation was undertaken in 2018 for the development of the Livelihoods Restoration Plan and in 2019 for to the water supply ESIA. Additionally, socio-economic surveys, which were undertaken in the spring of 2019 to update ESIA baseline data, which included consultation with local communities. The SEP was updated again in March 2020 for the start of drilling activities. All engagement activities are recorded. The SEP will be updated prior to the operations phase (ESAP Action). Ongoing stakeholder engagement will be required throughout the exploration, detailed design, construction and operations phases.

The results of the consultation indicate that the community is generally supportive of the Project. The primary benefits expected include jobs, business opportunities and electricity. Concerns include loss of farm and grazing land and physical displacement.

TMGO has an overarching Community Investment Guideline (2018), which identifies community needs and national and regional development goals. Under this Guideline, TMGO has prepared a Community Development Initiative Strategy (2020 – 2022), which outlines the planned community interventions for the next three years. The identified key intervention areas include provision of potable water; access to electricity; and creations of direct and indirect business opportunities. 

External Communication and Grievance Mechanisms:

A Grievance Mechanism has been developed and drafted as part of the SEP. As indicated the Grievance Mechanism has been communicated to local communities through the stakeholder engagement activities. Compensation committees, which also act as grievance redress committees, have been established in the local communities, which include local government representatives (Woreda and Kebele levels), Project representatives and local elders. All staff and contractors are trained in the grievance mechanism to ensure that all received grievances are recorded and addressed.

PS2:  Labor and Working Conditions

It is estimated that the proposed Project will generate approximately 170 jobs during drilling and 400 jobs at peak construction period. The operations phase of a plant with an installed capacity of up to150 MW plant will require approximately 120employees. TMGO currently has 28(17) employees, An Operations and management (O&M) contractor will also be engaged to manage the day-to-day operations of the plant.

Working Conditions and Management of Worker Relationship:

TMGO has prepared a Human Resources (“HR”) Policy and Handbook (January 2019, updated February 2020) consistent with the requirements of PS2, which includes TMGO’s principles and core values and a staff recruitment policy and procedure (October 2018).  Contractors will be contractually obligated to apply the TMGO HR handbook, and in line with TMGO’s HR requirements, KenGen has prepared a standard operating procedure for recruitment of term and contract employees.  As part of the HR procedures, an employee grievance mechanism has prepared in line with PS2 requirements. The employee grievance mechanism applies to both TMGO and contractor staff.

The HR Policy and Handbook requires the Project to avoid discrimination and ensure equality of opportunity during the recruitment processes of its own employees and workers engaged by third parties. The Project will preferentially hire local people for unskilled jobs. A Local Resource Development Plan has been prepared to ensure that local residents with the appropriate skills will be given priority for skilled jobs.

Occupational Health and Safety:

In 2018, an Occupational Health and Safety (“OHS”) consultant was contracted to develop TMGO’s OHS policy and manual (October 2019). The OHS manual is aligned with International Standards Organization (ISO) standard 45001:2018 on OHS management systems. KenGen has also prepared a Safety and Health Plan for the Project (December 2019) and has a standard operating procedure for OHS in place (October 2019). TMGO and KenGen develop a standard operating procedure in April 2020 as an annex to the OHS Manual to specifically to address Prevention of the Spread of COVID-19 and other infectious diseases. The procedure includes measures for training and awareness raising; social distancing; conducting meetings; monitoring and identifying risk; personal and respiratory hygiene; use of PPE and responding to an incident. The EPC contractor will also prepare OHS plans and procedures,which will be reviewed and approved by TMGO (ESAP Action).

The TMGO OHS consultant also supports implementation and monitoring of the OHS plans and procedures. Thus far, the consultant has undertaken two OHS audits (August 2019 and March 2020), which cover activities of both TMGO and contractors. The findings from the audits are communicated to TMGO and contractor management, and the implementation of corrective actions is tracked.

During exploration and construction, the risks include those typically associated with construction (e.g. noise, vibration, rotating and moving equipment, heavy vehicle operation and site traffic). The main health and safety risks associated with operation of the geothermal plant are potential fires and explosions, exposure to high levels of hydrogen sulfide, electrical hazards, noise and general accidents. The OHS manual and procedures identify measures to address these risks and appropriate training is provided to staff. 

During exploration, the drilling contractor will provide worker accommodation camp in the project site, and it is expected that up to 100 workers will be accommodated during drilling. For the construction and operations phase, the EPC, drilling and O&M contractors will have an accommodation camp near the proposed plant site. A Worker Accommodation Plan for exploration and construction will be developed for the exploration phase, and the accommodation at the project site will be consistent with the guidance provided in the IFC / EBRD Guidance Note on Worker Accommodation (ESAP Action).

Supply Chain:

HR Policies and procedures will prohibit the employment of workers under 18 years of age. The potential for child and forced labor in the primary supply chain is monitored and contracts with sub-contractors and suppliers include Environmental Health and Safety (“EHS”) requirements and provisions consistent with PS2 requirements to address labor issues including child and forced labor.  

PS3:  Resource Efficiency and Pollution Prevention

Resource Efficiency:

Resource efficiency considerations include water resource use and potential greenhouse gas emissions. Pollution risks include noise, air emissions, effluent, solid waste generation and hazardous materials storage, use and handling.

Exploration drilling will require 20 to 25 liters per second (l/s) of water for cooling and to wash the drill cuttings. Operation of a 150 MW plant will require approximately 35 l/s; however, the system will be set up to reuse process water and condensate as much as possible. Several alternatives were considered to supply water for the Project, including groundwater extraction, use of spring water, use of surface water from nearby lakes and trucking in water in tankers. Groundwater extraction is the preferred alternatives, and it is proposed that groundwater will supply 10,000 m3 reservoir built for the exploration phase. The 2017 ESIA indicated that water abstraction for exploration is not likely to affect groundwater resources used by local residents, as the boreholes will be located in areas where there is no community water resource use. Also, studies indicated that the water to be used during drilling is not suitable for consumption. The 2020 Water Supply ESIA confirmed that groundwater extraction for exploration is unlikely to affect local community resource use. Water for operations will be sourced from deep wells located near the plant site. Deep well drilling sites have been identified, and during exploration, pump tests will be undertaken to determine the potential impact of drawdown from the wells (ESAP Action).

Potential greenhouse gases (“GHGs”) associated with the emission of geothermal gases include carbon dioxide (CO2) and methane (CH4). Compared to fossil fuel power plants, however, emissions from geothermal power plants are very low. GHG emissions during drilling are expected to be insignificant. The composition of emissions during operations will be determined during exploration; regardless, they are expected to be limited. Average GHG emissions from geothermal energy generation are approximately 188 grams of CO2 equivalent per kilowatt hour (gCO2e/kWh).  

Pollution Prevention:

During exploration, noise emissions will primarily result from well drilling and blow-testing. Noise from drilling is expected to be in the range of 70-100 dB(A) within 10 m of the source. Based on the equipment to be used, the highest noise levels are expected to be 92 dB(A) at a 2-meter distance. Sound levels are expected to be within WBG EHS guideline values for nighttime noise (45 dB(A)) in residential areas at least 500 m from the drilling site. Based on topography, ground cover, and distance to the closest residence (approximately 500 m), drilling at the two (2) identified well pads is not likely to result in nuisance noise emissions. Modelling in the ESIA indicates that during blow-testing, noise levels may exceed guideline values at the residences closest to the site. This impact, however, is temporary. Site selection for wells will maximize the use of landscape barriers to minimize nuisance noise impacts, and a monitoring program has been developed to identify nuisance noise levels.  

During operation, noise is generated from the cooling towers, power plant and separators. Noise level from the cooling towers is expected to be around 80 dB(A). Modelling in the ESIA indicates that the WBG EHS guidelines residential nighttime noise limits will be met within 500 m distance from cooling towers and wells during operational phase. Noise from power plant and separators is expected to be around 55 dB(A) and residential nighttime noise limits are met within 200 m of the source. As with the siting of the wells, the proposed location of the plant has been selected to maximize the use of natural landscape barriers. 

The primary air emission of concern is likely to be hydrogen sulphide (H2S), which will be emitted during drilling and blow testing. Background air quality in the Project area is relatively pristine as there are no industrial activities near the Project. Dispersion modelling in the ESIA indicates that emissions of H2S are expected to be low and effects or air quality are limited to a small area around the well pad and injection pad sites and the power plant. The air emissions monitoring program in the ESMP includes suggested sites and frequency of monitoring air quality to identify any impacts from drilling and the plant.

Drilling of geothermal holes and testing of wells entails the discharge of effluent (drill cuttings and fluids and brine). Drilling fluids will be water-based and may contain chemical additives. Geothermal brine is likely to contain elevated levels of dissolved minerals compared to background levels. KenGen EMP includes measures to manage drilling effluents, cuttings and fluids. KenGen also has a standard operating procedure in place for Effluent and Water Quality Monitoring (August 2017) and a Spill Response Plan for drilling mud or a mixture of mud and cuttings (August 2017). During exploration, drill cuttings and fluids and brine will be discharged to lined ponds. The ponds will allow drill cuttings and other sediment to settle and to ensure suitable quality before disposal in shallow wells and / or open fissures. During operations, geothermal fluid will be sent to the separator, which will separate steam and brine. It is proposed that the brine will be reinjected via reinjection wells located approximately 1 to 2 km from the extraction wells. In addition to safe disposal of geothermal fluids, re-injection of brine is expected to contribute to sustainability of the geothermal resource. The exact location of the reinjection wells, risks associated with reinjection and quality of reinjection fluid will be determined during exploration (ESAP Action).

Main waste generation during the construction phase is expected to be excavation materials, concrete mix and concrete washings, iron and steel scrap, drilling mud, timber, paper and cardboard and household waste. Some hazardous wastes are also likely to be generated from the construction. Waste will be managed in accordance with national and international laws, and the PSs. KenGen has prepared a waste management plan for drilling (October 2019), and the EPC contractor will be required to prepare a detailed waste management plan to minimize the adverse impacts the waste can have on the environment (ESAP Action). KenGen’s waste management plan includes plans for management of sewage and other waste from worker accommodation and hygiene facilities. Emphasis will be placed on reducing waste, reuse and recycle, in that order. As indicated above, drill cuttings will be collected in a lined pond. Depending on the quality of the cuttings and sediment that settle out of the drilling fluid, it will be used as clean fill or disposed of in appropriate landfill. Solid waste generation during operations is expected to be limited to domestic waste.

The hazardous materials most likely to be used in considerable quantities during drilling are polymer liquid drilling fluid, bentonite and a thread lubricant and sealant. KenGen has a procedure in place to ensure that environmentally friendly (i.e. biodegradable, bioaccumulation potential-free and non-toxic) versions of these materials are used (February 2020). Material safety data sheets will be provided with all materials used in the drilling operation.

PS4:  Community Health, Safety and Security

Community Health and Safety  

Community health and safety issues during the operation of geothermal power generation plants include exposure to hydrogen sulfide gas; traffic safety (particularly during construction), infrastructure safety, impacts associated with in-migration of the project workforce and impact on community water resources. There is also potential for reinjection to stimulate minor seismicity; however, the likelihood of this in the Tulu Moye area is currently unknown and will be determined during exploration. The risk of H2S emissions are discussed above, and are expected to be low and limited to the area immediately surrounding the wells and plant site. KenGen has management and monitoring plans in place to detect and manage H2S emissions. A Transportation and Traffic Management Plan has been prepared for the construction phase (2020).

Safety risks associated with Project infrastructure include exposure to physical hazards associated with the wells and related pipeline networks. Hazards may result from contact with hot components, equipment failure, or the presence of active and abandoned well infrastructure which may generate confined space or falling hazards. Project infrastructure will be sign-posted, and access will be prevented by fences or other physical deterrents. Measures, such as burying pipes or installing heat shields will be considered where there is risk of community contact with pipelines. The ESMP includes a section on community risks during the drilling and exploration phase, and a Community, Health, Safety and Security Management Plan has been incorporated into the project ESMP for the exploration and construction phase of the Project. TMGO will update the Community, Health, Safety and Security Management Plan prior to operations (ESAP Action).

TMGO has prepared an Influx Management Plan (February 2019) to address the potential migration to the Project area. The plan includes consideration of gender-based violence and HIV / AIDS transmission risks. In addition, TMGO has a Workplace HIV / AIDS Policy (August 2018), which was developed to minimize the potential impact of the Project on HIV / AIDS rates in the Project area and to maximize the potential of the Project to address these issues. As discussed in the section above, there is not expected to be any impact on community water resources.

In addition to potential issues associated with population influx, the Water Supply ESIA (2020) identified the potential for community conflicts related to water resource management and use. TMGO has undertaken a security risk analysis to ensure thorough understanding of the potential security and conflict risks in the project area and to guide the Project in developing a proactive security and conflict management strategy which will include socio-economic mitigation measures that are sensitive to local dynamics and norms and which will not exacerbate or create local conflicts. Recommendations from the conflict analysis will be incorporated in the existing management plans.

Security Personnel:

KenGen has engaged a security sub-contractor to provide security during the exploration phase. The EPC will be responsible for engaging a security sub-contractor during the construction phase and the O&M contractor will engage a security sub-contractor for Operations. TMGO has a Security Policy (January 2017), which provides an overarching framework for security management of the Project and KenGen has issued a Security Policy Statement for the Tulu Moye Drilling Site (January 2020) in line with TMGO’s Security Policy. KenGen has also prepared a site-specific Security Plan (January 2020), Security Incidence Response Procedure (January 2020) and Deployment Instructions (March 2020) for the security service provider in line with the requirements of PS4.

PS5:  Land Acquisition and Involuntary Resettlement

General:

Land has been acquired from individual land users and the Oromia Forest and Wildlife Enterprise (OFWE) for the construction of the well pads, access roads, water pipeline and plant site. As discussed under PS1, the Project applies screening criteria to identify the sites for Project infrastructure, which include social considerations. All sites are selected to minimize the need for physical and economic displacement.

In compliance with national laws, a compensation committee was established in September 2018 to undertake asset inventories for land acquisition for Phase 1. The compensation committee was comprised of six members from the Woreda Administration and one rotating member from each Kebele, as required by law. All asset inventories were undertaken by the compensation committee with the assistance of a civil works construction surveyor and in the presence of the landholder and / or landholder’s family members. The process of establishing a cut-off date and asset inventory and valuation is described in the Livelihood Restoration Plan (LRP, October 2019), which was been prepared to address PS5 requirements for the economic displacement impacts of exploration and Phase 1 of the Project.

Displacement:

The 2 initial well pads and proposed plant site are located on land that is currently not used for agricultural purposes, though the plant site is used intermittently for livestock grazing. Land acquired along the access road was either grazing land or farmland. All land in Ethiopia is considered public land, but individuals can have user rights that allow them to hold and exploit the land for productive use. Land users can also have private assets on the land. In total, 15.51 hectares (ha) of land held by individual users were acquired, including 9.91 ha of farmland and 5.61 ha of grassland. Land acquisition affected 146 individual parcels used by 126 households; however, no parcel was acquired in whole. On average, affected households lost approximately 5% of their total landholding; however, 2 households lost between 20% and 30% of their total landholding. Based on asset inventories, affected farmland is not used to produce edible products, but instead is used for trees and shrubs that have some livelihood value (e.g. fuel wood; construction material).

In addition to individually held land, 12 ha of OFWE land was affected. OFWE manages approximately 3.4 million ha of forest across Oromia regional state. OFWE’s holdings in the Project area are utilized by local community members, who are recognized as legitimate users and local protectors of the forest; however primary livelihood activities, such as tree cutting for construction material, firewood and to make charcoal, are not permitted. In accordance with local law, 45% of compensation for this land was divided among local community users of the forest area, 5% was paid to the Kebele and 50% to OFWE.

In total, 48 structures were affected, including 6 structures (5 small shops or sheds and 1 house) and 42 fences. Of the six structures affected, three were outside the Project footprint, but compensated due to their poor condition and proximity to construction activities, which indicated a high potential for impacts due to vibration caused by heavy machinery operation. All displaced households were reconstructed on the same plot of land, and all residents of the affected houses were able to maintain their previous livelihoods.

While the LRP indicates only limited impact on livelihoods, it includes a number of support programs that will be provided to affected households, including support for crop farming and improved productivity; support for livestock rearing; and small business training. The broader community development initiatives (discussed under PS1), such as water supply, will also benefit affected households. The LRP does not include a stand-alone grievance redress mechanism, but land acquisition and livelihood grievances can be received through the general project grievance mechanism. The CLO participated in the land acquisition process and all project affected people were informed of the grievance mechanism during asset and socio-economic surveys.

No further physical or economic displacement is anticipated for exploration and construction of an up to 100 MW plant; however, the ESIA will be updated based on the findings of exploration drilling, which will confirm whether any physical displacement is required for subsequent phases. As the Project expands, additional land acquisition will be required for future well pad sites, access roads and expansion of the plant. A ‘Resettlement Policy Framework’ has been prepared, which is consistent with the requirements of PS5 and if additional impacts are identified, a separate Resettlement Action Plan (“RAP”) and / or LRP will be prepared and implemented to address these impacts (ESAP action).

Some land acquisition may also be required for the transmission line, which will be the responsibility of EEP. The transmission line alignment will be optimized to avoid in the first instance, or if not fully feasible, minimize physical and economic displacement. While EEP is responsible for design, construction and operation of the transmission line, TMGO will support development of the terms of reference for the ESIA and will be involved in the process for engaging the consultant to under the ESIA.

PS6:  Biodiversity Conservation and Sustainable Management of Living Natural Resource

General:

There are no protected areas (e.g. national parks, reserves or wildlife sanctuaries) within the Project area. The closest designated sites are Lake Koka (to the north) and Lake Zeway (to the south), which are located over 10 km from the Drilling area and are listed as Important Bird Areas (“IBAs”).

The biodiversity assessment undertaken as part of the ESIA determined that there is no ‘critical habitat’ (as defined by PS6) in the Project area, and subsequent studies have not contradicted this assessment. Approximately 22% of the Project area is considered ‘natural habitat’ and 75% is considered ‘modified.’  Natural habitat in the Project area includes dry evergreen montane forest and scrubland vegetation. The forest covers approximately 19% of the Project area, and is found primarily on the Gnaro lava field. The natural forest has only one stratum of tree which is dominated by wild olive trees (Olea europaea cuspidata) and African Juniper (Juniperus procera). The scrubland comprises approximately 3% of the Project area, and is dominated by small shrubs and grasses and exists in the escarpments and valleys. Only one plant species within the Project area i.e. the African Sandalwood (Osyris lanceolata) is listed in CITES Appendix 2, which means it is not necessarily threatened with extinction now, but may become so unless trade in this species is closely controlled. The majority of the land in the Project area is used for human settlement, agro-forestry and livestock grazing (i.e. ‘modified’).

The 2020 Water Supply ESIA indicated that if the Project intends to use spring water (which is not currently the plan), additional biodiversity studies are required to determine whether any aquatic species would be affected and to identify a suitable environmental flow release to minimize impact on downstream species (ESAP Action).

Protection and Conservation of Biodiversity:

Biodiversity assessments indicates that the actual impact on mammals and birds in the project area is likely to be limited. Exploration activities, construction and operation of the 100 MW plant will result in some habitat degradation and possibly direct habitat loss at and in the immediate vicinity of the well pad and plant sites. Noise and human activity are also likely to displace wildlife species. There are no mammal or bird species of conservation significance utilizing the habitat in the Project area. A framework Biodiversity Management Plan, which identifies the general potential impacts and management measures to avoid, minimize and mitigate biodiversity impacts, has been prepared as part of the ESIA and a site-specific Biodiversity and Soil Management Plan has been prepared for the drilling and construction phases as part of the ESMP. A Biodiversity Compensation Plan (February 2020) has also been developed, which characterizes the biodiversity impacts associated with Phase 1 of the Project and provides a plan to ensure no net loss of natural habitat values. Potential impacts to biodiversity from future phases will be assessed in the updated ESIA once the detailed design is available, and if needed, appropriate biodiversity management plans will be prepared as per the requirements of PS6 (ESAP Action).   

Management of Ecosystem Services:

Potential risks and impacts to ecosystem services were identified in the ESIA (2017) and in the Water Supply ESIA (2020). The Project will potentially impact provisioning (medicinal plants, tree-cutting, livestock, fisheries etc.) and regulating (soil, groundwater) ecosystem services that are important to local communities. The main impact during drilling, exploration and construction arises from direct loss of ecosystem services associated with land clearing and vegetation removal. As the footprint is limited (approximately 15 ha), these impacts are expected to be limited and will be managed through implementation of the LRP and the Biodiversity Compensation Plan.  

Broad Community Support is not applicable for phase 1 of this Project.

The documentation listed below is available electronically as PDF attachments to this ESRS at www.miga.org. 

• Environmental and Social Impact Assessment for Water Supply Alternatives. Stantec. March 2020.
• TMGO Environmental and Social Management System Manual. March 2020.
• Tulu Moye Geothermal Project Stakeholder Engagement Plan. Version 3. GIBB International and Reykjavik Geothermal. March 2020.
• Tulu Moye Geothermal Development Project – Biodiversity Compensation Plan. ERM. February 2020.
• Tulu Moye Geothermal Development Project – Livelihoods Restoration Plan. ERM. October 2019.
• Tulu Moye Geothermal Project Environmental and Social Action Plan (ESAP). August 2018.
• Tulu Moye Geothermal Development Project – Phase 1: Environmental and Social Impact Assessment (Parts I – III). VSO Consulting and TS Environmental. November 2017 PART 1, PART 2, PART 3
• Tulu Moye Geothermal Project Stakeholder Engagement Plan. Version 2. GIBB International and Reykjavik Geothermal. November 2017.
• Tulu Moye Geothermal Project Rapid Biodiversity Study Report Assessment

The above documentation is also available for viewing by contacting:

• Aynalem Getachew:   Addis Ababa, Ethiopia, a.getachew@tmgeothermal.com
• Kedir Temam: Iteya, k.temama@tmgeothermal.com

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