11444 - El Canada Hydroelectric Project

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Environmental Review Summary

Project Number

11444

Company Name

Generadora de Occidente Limitada

Date ERS Disclosed

May 10, 2002

Country

Guatemala

Region

Latin America and the Caribbean

Environmental Category

B - Limited

Status

Completed

Previous Events

Approved : Jun 26, 2002
Signed : Dec 12, 2002
Invested : Jan 28, 2003

Sector

Large Hydro - Renewable Energy Generation

Industry

other

Department

Regional Industry INF LAC & EUR

Project Description

The El Canadá hydroelectric power project (El Canadá) is situated 12 kilometers south of Quetzaltenango municipality and approximately 200 kilometers west of Guatemala City. The Instituto Nacional de Electrificación (INDE) originally conceived the project in 1963 and the concept was thoroughly developed by Acres International Corporation (Acres) in 1992 for INDE. In 1999 Energía Global International, Ltd. (EGI), a Central America renewable power specialist, acquired development rights and all technical studies from Acres. El Canadá will be constructed immediately down-stream of and will divert tailrace from the existing 15.5 MW Santa Maria hydroelectric project on the Samalá River in western Guatemala, which was completed in 1925 to power an electric railway. Diverted tailrace from the older project will flow through a 1.5 Km tunnel 2.5 meters in diameter to an 180,000 m3 five-hour peaking reservoir. Water stored in the reservoir will flow to a powerhouse situated on the Samalá River approximately 400 m vertically below the diversion dam and produce 43 MW of electric power using two Pelton turbines.

Environmental and Social

1. EGI environmental management system. As part of a previous IFC investment, EGI established an environmental management system to ensure that its investments are consistent with applicable host country environmental laws and regulations as well as applicable IFC environmental, health and safety guidelines and policies. EGI designated an individual with responsibility for environment that attended IFC’s environmental management workshop and submitted an environmental management plan. .

2. Dam safety. Acres International Corporation (Acres) evaluated the safety of the existing Santa Maria dam in a 1992 design report for another project located on the same river. The El Canadá diversion dam (4 m high concrete dam with an attached 3.5 m high deflatable rubber dam to spill flood flows) that will divert Santa Maria powerhouse tailrace to a 1.2 km tunnel is less than 10 m in height and thus a small dam per IFC’s dam safety policy and therefore does not require a detailed review by an independent panel. GDO’s engineering, procurement and construction contractor, Solel Boneh Guatemala, SA (Solel Boneh) has carefully reviewed engineering designs, geotechnical data and other supporting information and has agreed contractually to its design and construction without substantial modifications.

3. Samalá River water quality and ecological flows. The project is designed so that dry season flow (low flow) in the Samalá River will be maintained at 10% of the average seasonal (low water season) volume as required by the approved EIA. Low flow in the Samalá River is essentially anaerobic, untreated municipal effluent from upstream communities. Wet season flow is significantly higher and its quality is improved due to the volume of rainfall runoff. However, analytical data collected during the environmental review of the project demonstrate that the even during the periods of highest flow the quality of the water suffers from high organic load, silt and bacteriological contamination. Neither the existing nor the new project will contribute to deterioration of river water quality.

4. Seismology. Acres conducted reviews of seismic activities, peak accelerations and general publications for seismic activity in the project area in 1992. Seismology was reviewed again in 1999 for this project. After a thorough technical review of collected data, Acres used the 1992 evaluation for the Design Basis of the current project, which was published in March 2002. The 2002 Design Basis employed the latest International Commission on Large Dams terminology (Bulletin 72 - Selecting Seismic Parameters for Large Dams, 1989) for selection of earthquake design parameters.

5. Land acquisition: The individual parcels of land required for the elements of the project are generally disturbed and/or virtually inaccessible from the Samalá River. Approximately five parcels will be employed to a degree by construction and operation of the project. GDO purchased one small parcel adjacent to the Santa Maria substation for its electrical interconnection facilities. Transmission lines from the El Canadá powerhouse follow the penstock route up to the reservoir. From the reservoir to the switchyard the lines are situated on private land close to the defunct electric railway right-of-way (reservoir access road). Through usufruct agreements and easements, GDO arranged the use of INDE and other privately owned parcels (e.g. El Canadá coffee farm) for project purposes. GDO secured required property utilization rights for thirty years with provisions for renewals. No resettlement or relocation of individuals is required.

6. EIA preparation and approval. The Project’s Environmental Impact Assessment (EIA) contractor, Enertech, SA (Enertech), prepared the project EIA in October 1999 in accordance with the requirements of Guatemalan Law Decree 68-86, Environmental Protection and Improvement. As a result of the study’s evaluation of baseline conditions and specific project elements, it incorporates a detailed Environmental Management Plan with the objective of properly reducing potential negative impacts and incorporating environmental protection into all phases the project. The EIA also incorporates an Environmental Monitoring Plan that defines required actions needed to assure proper implementation of the project Environmental Management Plan. The Comisión Nacional del Medio Ambiente (CONAMA), which was formerly responsible for environmental reviews and permitting in Guatemala, approved the EIA in 2000. The new Ministry of Environment in 2002 confirmed the validity of the CONAMA-granted EIA approval. All required project construction permits have been awarded. .

7. Management of issues identified in the EIA. The Environmental Management Plan, incorporated into the EIA, defines specific environmental protection requirements through each phase of the project (before, during and after completion of construction). The engineering, procurement, and construction (EPC) contract awarded to Solel Boneh requires the firm to implement the plan. Specifically, Solel Boneh is responsible for compliance with World Bank guidelines, Guatemalan regulations, and EIA-discussed environmental and social issues throughout the construction period and thereafter, GDO. Representative activities include topsoil stockpiling, restoration of disturbed lands and related activities. Solel Boneh prepared a project construction-specific Environmental Management Plan for GDO to guide field activity. GDO has reviewed Solel Boneh’s approach and the final Environmental Management Plan is under preparation. Additionally, GDO selected Bioenlace, an environmental consultant, to audit Solel Boneh’s activities and to provide regular reports to GDO. Bioenlace will monitor the progress of construction to ensure compliance with the requirements of the EIA, Guatemalan law and the EPC contract. Receipt of the approved Solel Boneh Environmental Management Plan and a copy of the signed contract with Bioenlace will be a condition of disbursement.

8. Cultural and historical property. Enertech evaluated project properties and performed site walks to evaluate the likelihood of disturbing cultural or historical properties. Additionally, although not required by law or permitting requirements, GDO informed the Ministry of Culture and Sports, Cultural and Natural Heritage Management Office of project activities and provided the Natural Heritage Management Office with detailed engineering information. After review of project documentation, Heritage Management provided its supplemental clearance of the project area. In the event of chance finds, Solel Boneh has a procedure to manage such events and Bioenlace will monitor any such events in its assigned capacity.

9. Management of construction spoils. Spoils generated by dam abutment excavation and tunnel construction will be used for road construction and related activities. A significant amount of materials will be required, for example, to a useable road and to provide access from El Canadá farm to the powerhouse. Similarly, materials generated by upstream cuts for the storage reservoir will, in general, be employed to construct the downstream dike of the same structure.

10. Construction safety and occupational safety and health. Solel Boneh is required to implement an occupational safety and health program for its employees. Solel Boneh’s monthly construction progress report format incorporates a detailed safety statistics component including lost time and reportable incidents/accidents for the current month, year to date and project to date to facilitate trend identification and the need for corrective measures. As a supplement to these requirements, GDO will audit Solel Boneh’s mandatory occupational safety and health program effectiveness throughout the construction phase with the assistance of a third party safety consultant. GDO will have a similar program in place at the beginning of the operations phase.

11. Reduction of Air Emissions. Electric power generated by the project will displace ~160,000 tonnes of CO2 equivalent/year (greenhouse gas emissions). When the project is processed, a baseline study will be carried out to determine the precise amount of CO2 that will be displaced and in-depth quality control procedures will be applied to ensure compliance with the Kyoto Protocol.

Conclusion & Monitoring

IFC will monitor compliance with Guatemalan regulations and World Bank policies and guidelines during the life of the project. EGI will submit copies of periodic Bioenlace audits and monthly construction progress reports from Solel Boneh to IFC during the construction phase. After commencement of operations. EGI will submit annual environmental performance reports. IFC will evaluate these reports and EGI''s proposed remedial measures as needed to maintain compliance. Additionally, IFC will conduct periodic site reviews during project supervision.

This Environmental Review Summary (ERS) is prepared and distributed in advance of the IFC Board of Directors' consideration of the proposed transaction. Its purpose is to enhance the transparency of IFC’s activities, and this document should not be construed as presuming the outcome of the Board of Director’s decision. Any documentation that is attached to this ERS has been prepared by the project sponsor or in conjunction with the project sponsor and authorization has been given for public release. IFC has reviewed this documentation and considers that it is of adequate quality to be released to the public but does not endorse the content. The following ERS is disclosed in accordance with IFC's Disclosure of Information Policy that went into effect September 1998.

The map is for illustrative purposes and does not imply the expression of any opinion on the part of the World Bank, concerning the legal status of any country or territory or concerning the delimitation of frontiers or boundaries. Country borders or names do not necessarily reflect the World Bank Group's official position. In some cases, available project location information is limited to the country of the project's activities. Locations are approximate.

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