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

The project has been categorized as B given the expected limited adverse environmental and social (E&S) impacts resulting from construction and operation of the PV solar park and associated transmission line. Project location has been selected by the Company taking into consideration E&S issues and minimizing potential risks and impacts. The E&S issues associated to this project are those typical to similar PV solar parks, including, but not limited to: water use; short term impacts from construction and traffic increase; health and safety during construction and operation; and community engagement. No physical or economic displacement is generated, and there are no impacts on Indigenous Peoples lands or resources.

Since it is a clean renewable energy generation project with low adverse impacts the overall environmental impact of the project is expected to be positive given its contribution to the reduction of approximately 60,000 tons of CO2 equivalent per annum.

Risks to the health and safety of surrounding communities (PS4: Community, Health, Safety and Security) are limited and mostly related to the construction phase and can be avoided or mitigated through basic ESHS practices. The land acquisition for the site of the PV solar park was the result of a “willing buyer/willing seller” market transactions and the land easement acquisition for the transmission line (T-line), which could entail easement imposition if negotiations fails, will not generate physical or economic displacement; the project site has been used for agriculture for the last 30 years and no forests will be affected, additionally the project’s Environmental and Social Impact Assessment (ESIA) processes did not identify any significant risks or impacts on biodiversity; and the project is not located in or near Indigenous Peoples lands, hence PS5: Land Acquisition and Involuntary Resettlement; PS6: Biodiversity Conservation and Sustainable Management of Living Natural Resources; and PS7: Indigenous Peoples were not the focus of this review. In relation to PS8: Cultural Heritage, no risks associated to cultural heritage were identified at the site and the project has in place a Chance Find Procedure as per local requirements.

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.

Gauss Energía is committed to environmental and social (E&S) sustainability and to develop and implement its projects in a manner consistent with Mexican regulations and good international practices. The Company will formalize this commitment through the adoption of a corporate Policy defining its objectives and principles in relation to Environmental, Social, Health and Safety (ESHS) issues and assigning responsibility for its execution.



As part of the Project’s early development process the Company conducted a comprehensive alternative analysis based on technical, economic and E&S considerations, and selected the location with least E&S impacts. The site located covers an area of 100 ha that had been used for intensive agriculture by different large producers for over 30 years and it is surrounded by an existing industrial park and low density population areas. The selected Project site is also close to the electrical sub-station, hence the short length (2.8 km) of the associated transmission line (T-Line).



According to the Environmental and Natural Resources Ministry (SEMARNAT), since the Project area had already been heavily intervened for a long period of time and given its low E&S risks, the Project was exempted from submitting an E&S impact assessment –ESIA- (Manifestación de Impacto Ambiental). Nevertheless, the Company commissioned a E&S Impact Assessment (ESIA) covering applicable aspects of the IFC Performance Standards through a local environmental consultancy firm. The ESIA was completed in December 2012 and it confirmed that the Project is expected to have minimal adverse E&S impacts. Those impacts that were identified were mostly associated to the construction phase and can be easily mitigated through basic procedures.



The ESIA includes the following Management Plans: i) Emissions and Electromagnetic Fields Management Plan; ii) Soil and Water Management Plan; iii) Solid Waste Management Plan; iv) Preventive Reptile Management Plan (in the unlikely case workers come across some species of reptiles present in the region); and v) Social Impacts Management Plan.



The selected EPC Contractor has in place an Integrated Management System (IMS) that is certified ISO 9001 (Quality), ISO 14001 (Environmental Management), and OHSAS 18001 (Occupational Health and Safety). The EPC Contractor also has in place multiple ESHS procedures and good practice recommendations to manage impacts and risks associated to this type of projects, which have been developed based on its extensive experience in the sector. To ensure sound ESHS performance from subcontractors, the EPC Contractor contractually requires them to have in place adequate capacity and specific ESHS implementation plans to be able to comply with the applicable local regulations and the Project’s ESHS Management Plans and other relevant procedures.



Given the early planning stages of the associated T-Line, the corresponding construction and E&S permits are still pend
ing but the Company will have them prior to commencement of its construction as per local requirements. It must be noted that E&S risks and impacts from the T-Line are expected to be minimal given its short length and the fact that the proposed alignment crosses similar lands to those affected by the solar PV park and, in some segments, uses existing public roads. In any case, the Company is committed to constructing and operating the T-Line in accordance to good ESHS practices.

The Project is expected to generate 219 jobs during the construction stage and four (4) jobs during operation. The Project will maximize local hiring as much as possible.



The EPC Contractor has in place Human Resources procedures and measures, including contractual requirements for its subcontractors, aimed at ensuring compliance with local labor regulations which are aligned with IFC’s PS2. The minimum age to work at the Project will be 18 years old.



As part of its OHSAS 18000-management system, the EPC Contractor has developed a detailed ESHS Good Practice Guide for the construction and operation of the Project which is distributed to workers. This document includes detailed guidance for accidents prevention, use of Personal Protective Equipment (PPE), operation of heavy machinery, work at heights, work with power lines, exposure to chemicals, exposure to electromagnetic fields, first aid, and Emergency Preparedness, among others. The EPC Contractor will provide regular training on occupational health and safety to direct and subcontracted workers, and will monitor performance periodically.

This investment is expected to have largely positive environmental impacts as it will provide a renewable source of electric power, reduce air pollutants (i.e. NOx, SOx, PM) and displace approximately 60,000 tons of CO2-equivalent emissions per annum.



During the construction, the main Project impacts will consist essentially of: solid waste generation (99% non-hazardous such as earth moving spoils and equipment packaging materials) and emissions (dust, effluents and noise). No adverse impacts are expected during operation.



The Project’s use of underground water during construction (24 m3) and operations (89 m3 per year) –mainly for the purpose of cleaning of solar panels - will be marginal and it will not affect the quality or quantity of communal water resources. The total annual water consumption represents 0,033% of total underground water rights allocated to the Project area. The waste water from the modules cleaning process will be generated twice a year and infiltrated in the soil. Biodegradable detergents will be used hence no soil contamination will be produced. The construction phase will only generate some domestic effluent discharges and the Project will have in place adequate wastewater management equipment to mitigate any related impacts.



In addition to the generally applied environmental mitigation measures that the EPC Contractor and its subcontractors will implement for the Project, the ESIA includes the following of Management Plans:

i) Emissions and Electromagnetic Fields Management Plan: includes basic pollution prevention measures and measures to minimize and monitor impacts related to exposure to electromagnetic fields;

ii) Soil and Water Management Plan: includes erosion and storm water management measures;

iii) Solid Waste Management Plan: includes handling, storage and disposal of hazardous and non-hazardous solid wastes; and

v) Social Impacts Management Plan: includes mitigation measures for visual impacts on landscape (e.g. use of “live fences” on the West side of the project) and specific measures to mitigate potential impacts on a nearby community street generated by changes to natural drainage patterns.



The Project will not use transformers containing PCB or ozone depleting substances banned/phased out under ozone depleting substances rules.

The Project borders to the North-East with the La Paz Industrial Park, to the West with the Colonia Villas de La Paz (84 inhabitants); to the South-West with the lands of a large agribusiness company; and to the South with the electric sub-station of Olas Altas.

In early November 2012 the Company distributed informational brochures to the people and companies located in the surroundings of the Project and held an initial meeting with representative of the Municipality of La Paz, relevant environmental agencies and companies from the Industrial Park. In late November 2012, as part of the ESIA process, a more systematic process of house-by-house consultation was conducted with the objective of informing neighbors about the project and collecting their views and concerns.

The overall views collected were positive and favorable for the Project. In general, the stakeholders believe that the Project is beneficial to the region as it will generate clean energy and will be a source of temporary employment during construction. The Company will develop a basic Stakeholder Engagement Plan for the Project, which will include a robust Grievance Redress Mechanism.

B. de Ciruelos 278-2
Colonia Bosques de las Lomas
11700 México D.F.
Attn. Teresa García

Allende 896 esq. Josefa Ortiz de Domínguez
Colonia Centro
La Paz, Baja California Sur, C.P. 23000
Tel. (612)129-4044
Attn. Gisela Talamantes

Broad Community Support is not applicable for this project

Task Description	Due Date
Adopt a corporate-level ESHS Policy aligned with IFC’s Performance Standards	Condition of Disbursement
Develop a Community Engagement Plan including a clear Grievance Redress Procedure, in line with IFC PS1	Condition of Disbursement