IFC requires that this document is made available through the World Bank InfoShop and to the locally affected community no less than 30 days prior to project consideration by the IFC Board of Directors. The Summary of Project Information (SPI) also provides details of where the ERS has been made available to the locally affected community. The SPI must be sent to World Bank InfoShop no less than 30 days prior to project consideration by the IFC Board of Directors.

This is a Category B project according to IFC’s Procedure for Environmental and Social Review of Projects because a limited number of specific environmental and social impacts may result which can be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria. The review of this project consisted of appraising technical and environmental/social information submitted by the project sponsor, technical review by a consultant to IFC, and a field appraisal by an IFC Environmental Specialist. The following potential environment, health and safety and social impacts of the projects were analyzed. >> Corporate capacity in environmental and social areas. >> Land acquisition procedures for project facilities. >> Related facilities. >> Implementation of restoration and re-vegetation and community development initiatives. >> Dam and reservoir safety. >> Projects on international waterways.

The sponsor has presented plans to address these impacts to ensure that the proposed project will upon implementation of the specific agreed measures, comply with the environmental and social requirements - the host country laws and regulations and the World Bank/IFC environment and social policies and the environmental, health and safety guidelines. The information about how these potential impacts are being addressed by the sponsor/project is summarized in the paragraphs that follow. >> Corporate capacity in environmental and social areas BESA both constructs hydroelectric plants (e.g., Passo do Meio, Pedrinho, Salto Natal), and also acquires plants that have been constructed by others (e.g., Ponte, Granada, Salto Corgao). IFC's appraisal found that plants developed by BESA have been implemented in accordance with good industry practice, and that plants selected by BESA for acquisition are of similar quality, indicating that BESA is selective in its acquisitions. BESA has received all necessary construction and operating licenses for the five completed projects and the construction license for Salto Corgao. The Brazilian process includes EIA analysis and consultation requirements that substantially meet IFC's requirements. BESA has three full-time environmental staff responsible for administering environmental and social mitigation programs, and has adequate internal capacity to follow-through on operational period environmental commitments for mitigation and monitoring. >> Land acquisition procedures for project facilities Under Brazilian regulations, a hydroelectric plant developer has the right to expropriate land necessary for the project's execution. BESA's approach has been to acquire land through negotiated settlements, and to limit use of expropriation. This approach has been generally successful, with only a few cases having been turned over to the government for expropriation. Based on available information, land acquisition has been conducted in general accordance with the requirements of IFC's Resettlement Policy. >> Related facilities Each of the six projects required related facilities such as transmission lines and access roads; these can have negative effects if they cross ecologically sensitive areas, open areas to unwanted development, or require resettlement. Based on available information, short transmission lines were developed without significant issues as part of the project for five sites. A longer transmission line has been constructed for the Salto Corgao (the owner and constructor of this transmission line is CEMAT), mainly through a cattle ranching area. Local roads run to within a short distance of each of the sites. >> Implementation of restoration and re-vegetation and community development initiatives IFC's appraisal found that restoration and revegetation and other mitigation programs are well-conceived and are being well-executed by capable staff. BESA is committed to ensuring proper mitigation and follow-though during operation. The plants have also contributed to the development of parks and community activities, often in coordination with owners of other hydroelectric plants on the same river. >> Dam and reservoir safety IFC's Safety of Dams policy requires that dams be designed and their construction supervised by experienced and competent professionals. Because five of the six projects are in operation, and construction of the sixth is nearly complete, IFC engaged a Belo Horizonte, Brazil-based engineering company to conduct an onsite post-construction review of the projects. The multidisciplinary team (geology and civil, mechanical, and electrical engineering) inspected all parts of the power plants and reviewed representative technical reports and design documents, and was satisfied with the dams' design, construction, and current operation. All of the projects are of run-of-river configuration, with small reservoirs. Five of the six dams are higher than 15 meters (one is a low diversion structure); however, earthquake risk is low, spillways are conservatively configured for a design flood recurrence of 10,000 years, none had special design complexities, and risk to downstream populations is low (in one case – Granada – 32 families living in a downstream floodplain were relocated by the project as a precaution). The designs and construction meet the intent of IFC's policy. >> Projects on international waterways IFC's International Waterways policy requires notification of riparians for projects on waterways, including rivers (and their tributaries) that form a boundary between two or more countries and river that flow through two or more countries. Four of BESA's projects are on tributaries to rivers that flow entirely within Brazil and eventually discharge to the Atlantic Ocean. However, Pedrinho and Salto Natal are on upstream tributaries of the Rio Parana, which is an international waterway covered by the policy. IFC will conduct notifications under the policy through the relevant IFC Executive Directors.

This ERS contains the full environmental and social documentation prepared for the project.

Accordingly, IFC concludes that the proposed project will meet the applicable World Bank/IFC environment and social policies and the environmental, health and safety guidelines upon successful implementation of the planned mitigation measures.

IFC will evaluate the project's compliance with the applicable environmental and social requirements during the lifetime of the project by reviewing the annual monitoring reports (AMRs) prepared for the project covering ongoing performance of project-specific environmental, health and safety and social activities. Periodic site supervision visits will also be conducted.