While all Performance Standards are applicable to this investment, IFCs environmental and social due diligence indicates that the investment will have impacts which must be managed in a manner consistent with the following Performance Standards.

PS 1 – Assessment and Management of Environmental and Social Risks and Impacts
PS 2 - Labor and working conditions
PS 3 - Resource Efficiency and Pollution Prevention
PS 4 – Community Health, Safety and Security
PS 6 – Biodiversity Conservation and Sustainable Management of Living Natural Resources

If IFC’s investment proceeds, IFC will periodically review the the project’s ongoing compliance with the Performance Standards.

PS1 is applicable because the Project has potential environmental and social risks and impacts. PS2 is applicable because, to implement the Project, the Company will have both direct employees and contracted workers. PS3 is applicable because the Project has potential adverse impacts on human health and the environment, potential opportunities to improve resources efficiency, including energy and water, and to reduce project-related greenhouse gas emissions. PS4 is applicable because the Project has potential risks and impacts to affected communities. PS6 is applicable because the Project is located in a natural habitat where human activity has not essentially modified the area’s primary ecological function and species composition.

PS 5: Land Acquisition and Involuntary Resettlement - PS5 is not applicable because the Project site is owned by the Turkish Government and no private properties exist on the site. The existing pipeline is located at the boarder of the Project site, so no land acquisition is necessary for connecting the pipeline to the Project. The construction of the associated transmission lines will have to secure the needed right-of-way but, based on the information about possible routing of the transmission lines, the right-of-way arrangement is expected to be achieved without involuntary resettlement. 

PS 7: Indigenous Peoples - PS7 is not applicable because the Project will not affect any indigenous peoples.

PS 8: Cultural Heritage - PS 8 is not applicable because the ESIA did not identify any cultural heritage on the Project site. Chance find procedures will be developed as part of the Company’s ESMS and the EPC Contractor and the O&M Operator will be required to follow the procedures in the event that cultural heritage is subsequently discovered.

The Project is to develop a new large scale natural gas fired combined cycle plant (835MW) in an unused meadow land about 50 km east of Ankara and the key environmental and social issues are: (i) water supply and effluent discharge; (ii) air quality impacts; (iii) management of spoil from excavation activities during the construction phase, (iv) E&S impacts of associated transmission line construction and (v) conversion of natural habitat. Due to the potential significant adverse environmental and social impacts and risks, this Project is a category A project according to IFC’s Environmental and Social Review Procedures.

IFC's appraisal considered the environmental and social management planning process and documentation for the project and gaps, if any, between these and IFCs requirements. Where necessary, corrective measures, intended to close these gaps within a reasonable period of time, are summarized in the paragraphs that follow and (if applicable) in an agreed Environmental and Social Action Plan (ESAP). Through the implementation of these measures, the project is expected to be designed and operated in accordance with Performance Standards objectives. - Impacts of water intake on the river flow level during dry months of the year and the existing downstream river water users. Mitigation measures: Water intake from the riverbed of the Kizilirmak River using Caisson wells and selection of closed wet cooling system to minimize water intake volume.

- Impacts of the effluent discharge on the quality of Kizilirmak River. Mitigation measures: Use of waste water treatment plant to control quality of effluents in compliance with Turkish effluent standards and World Bank Group effluent guideline limits.

- Air quality impacts of the Project (including cumulative air quality impacts of the other gas fired combined cycle power plant projects in neighboring areas) on ambient air quality levels of the project affected areas. Mitigation measures: Use of dry low NOx technology for gas turbines to control NOx emission levels in full compliance with Turkish, WBG and EU NOx emission standards and guidelines.

- Impacts of excavation activities to construct the Project on a hilly site. Mitigation measures: Utilization of spoil from excavation activities within the Project site to the extent possible, and in case excess spoil needs to be disposed outside the Project site, ensure that the disposal will not affect the river, surrounding soils, and ambient air quality.

- E&S impacts of associated transmission lines. Mitigation measures: Considering that the possible corridors of the transmission lines are not likely to cross urban areas or ecologically sensitive areas, the E&S impacts are expected to be manageable if Turkish, EU and WBG E&S standards and guidelines are followed. A separate ESIA will be undertaken to assess the impacts and identify necessary mitigation measures.

- Conversion of natural habitat of the Project site. Mitigation measures: Design the power plant layout to minimize conversion of existing natural habitat, and restore affected natural habitat during the construction phase.

Environmental and Social Assessment and Management System: Both ACWA Power and ESER, the Sponsors of the Project, have well established environmental and social assessment and management systems. ACWA Power has its own HSE team who undertake periodic inspections and audits to monitor HSE management activities and performance. All projects by ACWA Power are subject to environmental and social impact assessment which complies with both local and World Bank Group standards. ACWA Power uses HSE performance indicators to monitor performance and reports the outcomes in their corporate annual reports. ESER has been a signatory of UN Global Compact (a strategic policy initiative for businesses that are committed to aligning their operations and strategies with universally accepted principles in the areas of human rights, labor, environment and anti-corruption) for four years. ESER’s management system has been certified under ISO 9001, ISO 14001, and OHSAS 18001. ESER has a dedicated HSE team headed by a QA/QC and HSE Manager. Farcan Energy, the Company developing the Project, is supported by both ACWA Power and ESER to establish and maintain the Environmental and Social Management System as described below.

Policy: Both Sponsors, ACWA Power and ESER, have overarching E&S policies such as ACWA Power Commitments Statement addressing corporate responsibility, governance and environmental sustainability; ACWA Power Health, Safety and Environmental Policy Statement committing to implement a risk-based HSE management system that conforms to international practices and standards; ESER Quality Policy Statement, ESER Environmental Policy Statement, and ESER Social Responsibility Statement. Based on the policies of the Sponsors, Farcan Energy will establish its own overarching policy defining the E&S objectives and principles that guide the Project to achieve sound E&S performance.

Identification of Risks and Impacts: The Company retained ESER Project and Engineering Company, a subsidiary of ESER, to conduct an environmental and social impact assessment (ESIA) for the Project. ACWA Power and its external HSE consultant (5Capitals) provided guidance to ensure that the ESIA conformed to ACWA Power’s requirements to follow international standards. The Company submitted the ESIA report to the Turkish Ministry of Environment and Urban Planning on August 17, 2011, and received the positive EIA document (which is equivalent to the approval of the EIA) on May 4, 2012.

Associated facilities: In order for the Project to transmit the electricity generated, two 380 kV transmission lines (55 km and 8km) will be built by the Company. As soon as the Company receives the Generation License from EMRA (Energy Market Regulatory Authority), it will sign the Grid Connection Agreement with TEIAS (Turkish Electricity Transmission Co.), and conduct a joint site visit to finalize the transmission line routing. The Company has retained the same ESER Project and Engineering Company who prepared the main power plant ESIA to conduct this transmission line project ESIA.

Cumulative impacts: Within the area of influence of the Project, there is another natural gas fired combined cycle power plant project being planned called Kirikkale NGCCPP (1,200 MW), about 10 km from the Project. The Company reviewed the EISA for this Kirikkale NGCCPP and conducted a cumulative air quality impact assessment as part of the Project’s ESIA. Water intake and discharge cumulative impacts were not assessed because Kirikalle NGCCPP does not take from or discharge to the Kizilirmak River.

Management Programs: Based on the baseline analysis and impacts assessment of the ESIA, the Company designed the Project to avoid or minimize impacts and risks. The mitigation measures and monitoring program were presented in Table 87 (Construction Phase) and Table 88 (Operational Phase) of the ESIA. The key construction phase mitigation measures include (i) immediate stopping of the excavation works in case any cultural and archaeological asset is encountered to enable the relevant institution to evaluate, (ii) storage of top vegetative soil excavated without mixing with other types soil so that it can be reused for landscape works, (iii) storage of excess excavation materials without damaging the surrounding environment, and (iv) obtaining necessary permissions from Kirikkale Forest authority before starting construction activities. The key operational phase mitigation measures include (i) continuously monitor NOx emissions to confirm compliance and (ii) treating wastewater in the wastewater treatment facility before discharging to Kizilirmak River. In addition to the Tables 87 and 88, the ESIA also includes E&S Management and Monitoring Plan listing action items to comply with EBRD Performance Requirements addressing management program, HR policies, pollution prevention, community health, protection of biodiversity, stakeholders engagement.

Organizational Capacity and Competency: Farcan Energy plans to employ about 50 people during construction phase and 30 people during operational phase. In both phases, the Company will be headed by an Executive Managing Officer (EMO) and dedicated HSE Specialist and Environmental Specialist will report to the EMO on HSE issues, implementation of the ESMS and E&S Management and Monitoring Plan in close coordination with the Project Director and QA/QC Manager. Farcan Energy’s HSE and Environmental Specialists will coordinate implementation of the E&S Management Monitoring Plan with the EPC Contractor (during the construction phase) and the O&M Contractor (during the operational phase). The EPC Contract has been agreed with Samsung C&T Corporation. Detailed EHS requirements, including the IFC/World Bank Group EHS Guidelines, were specified as part of the EPC Contract. The O&M Contractor will be NOMQAC, a subsidiary of ACWA Power. NOMAC’s management system has been certified to ISO 9001, ISO 14001, and OHSAS 18001. As an O&M Operator of the Project, NOMAC estimates to employ around 150 people, including two dedicated HSE personnel. NOMAC has a strong health and safety program (defining functions to run HSE actions, hazardous substance management, waste management) and safety training program.

Emergency Preparedness and Response: As part of the ESIA, the Company prepared an Emergency Response Plan (Section XI of the ESIA) describing key components such as responsibilities of response teams, rescue teams, first aid teams, company guard teams, and measures to be taken for different emergency situations such as earthquake, fire, flood and inundations, and natural gas leakage. Details of “Emergency Response Plan” for each emergency case will be prepared in coordination with the EPC Contractor, prior to the start of construction, and with the O&M Contractor, prior to the start operations.

Monitoring and Review: Farcan Energy will establish procedures to monitor the effectiveness of the mitigation measures proposed in the ESIA (Table 87 for the construction phase and Table 88 for the operational phase) in coordination with the EPC and O&M contractors. Farcan Energy’s HSE and Environmental Specialists will receive the HSE monitoring data from those contractors and report to both external regulators as required and to the management of Farcan Energy. HSE performance will also be audited by ACWA Power and ESER, in accordance with their internal EHS auditing systems. In accordance with the Stakeholders Engagement Plan, Farcan Energy will make the HSE monitoring reports available to stakeholders by placing these at ESER’s central building in Ankara and at the construction office on site (construction phase) and at the project area in Municipality Yahsilhan (operational phase).

Stakeholder Engagement: As part of the ESIA process, Farcan Energy identified the different categories of stakeholders (internal, external including affected residents and clients, including people who will benefit from the Project). Farcan Energy prepared the Stakeholders Engagement Plan which includes maintaining consultation, disclosure of information and grievance mechanism.

Working Conditions and Management of Worker Relationship: Both ACWA Power and ESER have HR policies and procedures that meet the requirements of IFC Performance Standards. Farcan Energy will establish HR policies and procedures based on those of ACWA Power and ESER to ensure compliance with IFC standards.

Protecting the Work Force: Farcan Energy will not employ children or forced labor.

Occupational Health and Safety: Both the EPC Contractor (Samsung C&T Corporation) and the O&M Contractor (NOMAC, a subsidiary of ACWA Power) have established health and safety management systems and are certified to OHSAS 18001. NOMAC’s safety record shows that they have not encountered any lost time injuries during the last 2 years (for an average of 600 workers). Farcan Energy’s HSE Officer will work closely with the EPC and O&M Contractors to ensure that both construction and operation follow good international industry practices, including IFC/WBG EHS Guidelines.

Resource Efficiency: The Project will use combined cycle gas turbine technology with 58.6 % energy efficiency (i.e. “net” efficiency after deducting auxiliary electricity consumption, and on Lower Heating Value basis). The Project will be one of the most energy efficient thermal power plants in Turkey. The Company reviewed three alternative cooling systems for the Project: once-through cooling, wet closed cooling, and dry closed cooling. The once-through cooling system was not selected due to the potential impacts on water intake from, and thermal discharge back to, Kizilirmak River. A dry closed system would minimize water intake from the river, but have less energy efficiency due to auxiliary electricity consumption needed for the cooling system. Considering the water availability from Kizilimak River, the wet closed cooling system was selected, enabling the Project to achieve higher energy efficiency over dry closed cooling system while minimizing water intake impact.

Greenhouse Gases: The ESIA estimated that the Project will produce 6,262 GWh of electricity per year, with carbon dioxide emissions of about 2.2 million ton per year at CO2 emissions performance of 0.347 kgCO2/kWh. This 0.347 kgCO2/kWh performance is better than the Turkish grid average performance (0.484 kgCO2/kWh, 2007-2009 average, according to the latest 2011 International Energy Agency statistics) and comparable to good global industry practice benchmarks.

Water Consumption: The Project will require 1,113 m3/h of water, mainly to provide make-up water to the wet closed cooling system. Nine Caisson wells will be installed (each 5m diameter, 10m deep) along the riverbed of Kizilirmak River. Water intake from the Caisson wells, rather than direct intake from the surface Kizilirmak River, will reduce the Project’s impacts on river flow. The Company estimates that during the dry months of the year (October to April) under the worst case, the Project’s intake of water is a small portion of the river flow (less than 8 – 10 %, in the worst case). Considering that about one third of the water taken will be discharged back to the river after treatment, the impacts of the Project on the river flow regime is considered to be minimal. The Company will work with DSI (State Hydraulic Works) in charge of the river flow management to ensure that the Project’s impacts on river flow will remain minimal. NOMAC, the O&M Contractor, will implement water saving measures to maximize the operational efficiency of the plant.

Pollution Prevention (Air Emission): NOx emissions of the Project will be limited to 50 mg/Nm3 at 15% excess O2, in compliance with Turkish standard, IFC/World Bank Group EHS Guideline limit, and EU standard, which are also 50 - 51 mg/Nm3. The stack height was initially proposed in the draft ESIA as 60 m, but following further review by the Ministry of Environment, stack height will be a minimum of 75 m. The ESIA assessed the cumulative air quality impacts of the Project (835MW) and the other gas-fired combined cycle power plant project (1,200MW) within the same area of influence. The results show that maximum cumulative incremental impacts are 22.28 ug/m3 (24-hour, 95%) and 13.88 ug/m3 (annual average), far below the relevant air quality standards of 300 ug/m3 (24-hour, 95%) and 60 ug/m3 (annual average). The Company will conduct ambient air quality monitoring program to confirm that the Project’s impacts are small.

Pollution Prevention (Liquid Effluents): The Project will have a wastewater treatment facility consisting of pH – coagulation – floculation, sludge thickener, sludge dehydration, and neutralization pond. Wastewater after treatment will comply with the Turkish liquid effluent standards and IFC/World Bank Group effluent guideline limits (pH, TSS, Oil and grease, total residual chlorine, heavy metals, and temperature increase).

Wastes: The ESIA estimated that the excavation for the Project construction will produce about 150,000 m3 of material. The Company is working with the EPC Contractor to minimize the amount of excess material. If excess material needs to be disposed, the Company will ensure that it is not disposed in any creek bed, surface water resource, agricultural land or forestry areas located around the Project site, and will work closely with Kiliclar Municipality to identify an acceptable storage site. Both the EPC Contractor and O&M Contractor will implement hazardous waste management to minimize and control of release of hazardous materials (e.g. used oils, chemicals for water treatment, water quality analysis, wastewater treatment).

Community Health and Safety: Considering the sufficient distance (about 2km) between the Project site and the nearest village (Hacibali villalge), and considering the characteristics of inherent hazards of the Project, the risk of non-routine hazardous materials release on communities is small. A detailed waste management plan, including hazardous materials management and safety, will be prepared in coordination with the EPC Contractor for the construction phase, and with the O&M Contractor for the operational phase.

The ESIA notes that a temporary construction camp may be established during the construction phase of the Project. The Company included this possibility in the ESIA so that the EPC Contractor can consider this as an option. However, due to the labor force availability in the region and the accessibility to the Project site from the neighboring communities and municipalities, it is not likely that a construction camp will be established. In case a camp does need to be established, the Company will require the EPC Contractor to implement measures to avoid any negative impacts on surrounding communities.

Ecosystem Services: The Project will take water from the riverbed of the Kizilirmak River. Other users of water from the Kizilirmak River are for hydropower generation and irrigation. Considering that (i) the amount of water intake from the river is relatively small compared with the worst case dry months of the year, (ii) water is taken from Caisson wells rather than direct surface water of the river which will reduce the intake impacts on the river flow, and (iii) about one third of the water taken will be treated and discharged back to the river, the Project’s impacts on primary ecosystem services of the river is not significant. Nevertheless, the Company will monitor the impacts of the Project’s water intake on the downstream ecosystem services of the river as part of its ongoing monitoring program.

Security Personnel: The Project will have a security arrange typical to this type of facility in the region. The Company will work with the EPC and O&M Contractors to ensure that the security arrangement will follow the requirements of IFC Performance Standard including provision of a grievance mechanism.

The Project site is a hilly natural meadow land with steppe vegetation of about 1,100 meters long and 200 meters wide, in total 22.7 ha. The elevation of the site ranges between 670m to 745m above sea level. The ESIA concluded that no endemic flora was observed within the Project site, and flora and fauna species of the Project site are found in the surrounding areas as well. Because the Project site has not been used for any other purposes, the site area is considered as natural habitat, and the Company will minimize the conversion of the habitat by adjusting the plant layout as small as possible (less than 5 ha).

The ESIA noted that, according to the Kirikkale Forestry Department, the Project site is within forest land and the Company needs to obtain the required permission before starting construction activities. The ESIA explains that the baseline study and the field visit conclude that the dominant vegetation of the Project site is steppe, and forests have been replaced by herbaceous plants and shrubs. Nevertheless, the Company will obtain the necessary required permission from the Kirkkale Forestry Department as required.

Before initiation of the ESIA process, the Company visited the local authorities in the region (Kirikalle Governorship, Kirikkale Parliament Members, Yahsihan Municipality, Kiliclar Municipality and Irmak Municipality) to inform them of the Project. The Company used the national and local newspapers and local announcement boards in May 2011 to announce the Public Participation Meeting, targeting local communities of Kiliclar, Irmak and Yahsihan Municipalities and Hacibali Village. The Public Participation Meeting was held on June 3, 2011 in Coffee House of Kiliclar Municipality. The meeting was chaired by the Provincial Director of Environment and Urban Planning. ESER Project and Engineering Company explained the Project and its E&S impacts and mitigation measures. Leaflets about the Project and its impacts were distributed to local residents. A grievance / suggestion mechanism was created not only for the public disclosure period of ESIA documents, but also for receiving complaints/ inquiries from stakeholders during construction and operational phases.

Major concerns identified by the communities were about whether their agricultural lands would be damaged because of the Project and whether employment opportunities would be provided to local residents. The Company responded that the surrounding agricultural lands will not be affected by the Project, and the personnel who would be employed both during construction and operational phases would be in general from local communities.

The ESIA was submitted to the Ministry of Environment in August 2011. After the disclosure period, and further review by the Ministry, the Company received the Ministry’s decision of “EIA Postive” in May 2012. The ESIA documents included the main ESIA report, Non-technical Summary, E&S Management and Monitoring Plan, and Stakeholders Engagement Plan (SEP). The Stakeholder Engagement Plan describes the details of the Grievance Mechanism including the Grievance Form and where / to whom to submit the form, and the list of addresses where ESIA documents are available during project development stage, construction period and operational period. The SEP also explains where the monitoring reports will be available during the construction and operational phases. No negative comments against the Project have been received by the Company. Similar community engagement activities will be conducted during the forthcoming associated transmission lines ESIA process.

The ESIA documents are available at:
- ESER Project and Engineering Company
Address: Turan Günes Bulvari Cezayir Caddesi 718. Sokak No:14 Yildiz/Çankaya ANKARA 06550.
Telephone: 00 90 312 408 00 00.
E-Mail: mailto:cevre@espm.com.tr Contact Person: Mr Korhan Altindal, Environmental Projct Manager

- In Kirikkale Provincial Directorate of Environmental and Urban; Planning-Kaletepe Mahallesi Samsun Bulvari; Ulutas Apartmani No:151 Kirikkale

The ESIA documents (both in Turkish and in English) are also available at ESER’s website:
http://www.eser.com/index.php?eser=sirket_detay&id=MTU

Broad Community Support is not applicable for this project

Current client performance is aligned with applicable Performance Standards and EHS Guideline requirements. No ESAP is required.