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 IFC's 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

PS4, 5, 6, 7, and 8 are addressed under PS1.

This is a category A project primarily due to the likelihood that potentially significant and diverse environmental and social impacts could be associated with some of ACWA Power’s prospective business activities, particularly development and operation of large-scale greenfield thermal power plants, water desalination plants, and renewable (wind, solar) power plants.

The key environmental, social, health and safety risks and issues associated with this proposed investment include: the Company’s management capacity to acquire or develop power and water desalination projects, including how environmental and social consequences (including cumulative impacts as appropriate) are taken in account in planning, design, construction and operation; air emissions from thermal power generation; effluent discharge from water desalination, thermal discharge from once-through cooling systems of thermal power plants located on the coast, avian impacts imposed by solar / wind turbine operation; greenhouse gas emissions from fossil fuel combustion, stakeholder engagement; land acquisition and compensation associated with all project elements; potential E&S impacts from associated transmission lines; fuels/hazardous materials storage and handling; emergency response planning and preparedness; and labor and working conditions, including employee retrenchment and occupational health and safety. IFC’s appraisal considered ACWA Power’s environmental and social management systems and gaps, if any, between this system and IFC requirements. Where necessary, corrective measures intended to close these gaps within a reasonable period of time, are summarized in the paragraphs that follow and in the agreed Environmental and Social Action Plan (ESAP). Through implementation of this management system and ESAP, ACWA Power is expected to operate its facilities in accordance with Performance Standards objectives.

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.

Policy:

ACWA Power has two primary policies, “Our Commitments” and the “Health, Safety and Environment (HSE) Policy” both of which are signed by the Chairman and CEO/President in 2010. These policies are currently under review for further enhancement. NOMAC, ACWA Power’s wholly owned subsidiary that manages, operates and maintains the majority of ACWA Power’s facilities, has its own HSE Policy signed by the President, dated November 21, 2010. These policies are included in employee induction briefings, on notice boards and as large exhibition posters in reception foyers. The HSE Policy and other HSE and Operations and Management (O&M) standards and guidelines are distributed to newly established project companies as part of the start-up work. These policy documents are focused on HSE aspects of performance, and ACWA Power will work to make them fully consistent with IFC Performance Standards (see ESAP action 1).



Identification of Risks and Impacts:

When a Request for Proposal (RFP) is issued by a government entity for potential power and/or desalination projects, ACWA Power’s business development team starts to prepare a proposal to respond to the RFP. This preparation includes preparation of an environmental and social (E&S) impact scoping study to identify potential E&S impacts and necessary mitigation measures. Once ACWA Power is awarded a project, the company engages external independent environmental and social consultants to conduct a detailed E&S impact assessment. In the past three years (2011-2013), ACWA Power conducted on average eight E&S studies (scoping plus impact assessment) per year for its projects. In preparing such studies, ACWA Power uses as its reference standards those of the World Bank Group/IFC, as well as those of other relevant international financial institutions, such as the Equator Principles, in addition to local legislation as the benchmark. Where relevant, ACWA Power’s E&S impact assessments consider the cumulative impacts from other independent power producers (IPPs) and integrated water and power plants(IWPPs) already developed or proposed for development in the same geographic area. Marine modeling undertaken for these E&S impact assessments demonstrate that thermal dispersion patterns occur close to the coastline and do not affect international waters. Development of associated gas pipelines, water pipelines or transmission lines, and their E&S impact assessments are normally undertaken by electricity and water off-takers or fuel suppliers, but where connections are an integral part of the project, they are also considered as part of the overall project E&S impact assessments. Where project affected people are differentially or disproportionately affected by the project because of their disadvantaged or vulnerable status (for example, pastoralists or Bedouin people), ACWA Power ensures that the E&S impact assessments undertake appropriate consultation to the extent allowed by local law and
regulations.



For existing assets (both construction phase and operational phase), ACWA Power conducts E&S audits through (i) regular E&S audits undertaken by ACWA Power corporate E&S team, (ii) periodic E&S visits and inspection by ACWA Power corporate E&S team, (iii) internal administration audits covering HSE aspects, and (iv) E&S audits conducted by independent competent third party experts. NOMAC (a wholly owned subsidiary of ACWA Power to provide Operations and Maintenance (O&M) service of power and water plants) also conducts E&S audits on a regular basis.



Management Programs:

For the last several years, ACWA Power has been strengthening its E&S management system. Key E&S procedures that have been approved and are currently in use at all operational facilities include Asset Management Operation and Maintenance Standard and Guideline that integrate HSE; Crisis Preparation and Response Procedure, Crisis Management Procedure, and Crisis Communications Procedure; Incident Investigation Procedure, HSE Monitoring and Reporting Procedure. Various other E&S procedures have been drafted and are pending approval by ACWA Power’s management. For the construction phase of projects, E&S action plans (or Construction E&S Management Plan) are developed as part of the E&S impact assessment, and this is included as a contractual requirement to EPC (Engineering, Procurement and Construction) contractors. Compliance is monitored by the construction site and corporate teams who are supported by independent environmental consultants. E&S action plans for operational sites are integrated into the annual business plans that are regularly monitored by site leadership, project company teams and corporate personnel. The findings and recommendations from periodic audits are included into these action plans.



Organizational Capacity and Competency:

ACWA Power and its subsidiaries have about 70 staff deployed at corporate offices, operational sites and construction sites with HSE responsibilities. Dedicated HSE managers and officers are assigned at ACWA Power’s head office in Riyadh (Saudi Arabia), regional offices in Dubai (UAE), Rabat (Morocco), Johannesburg (South Africa), Istanbul (Turkey), and Beijing (China). Furthermore, NOMAC (ACWA Power’s O&M service company) and CEGCO (ACWA Power’s electricity generation company in Jordan) also have dedicated HSE managers. HSE managers and staff of all these entities attend semi-annual workshops to share HSE knowledge and experience and discuss emerging HSE issues.



Emergency Preparedness and Response:

The company has a suite of four emergency preparedness, response, management, and incident investigation procedures. These are distributed to all offices and project companies for customization and implementation. Each office and site of ACWA Power has an emergency preparedness and response plan as per the requirements of the company’s requirements and guidelines.



Monitoring and Rev
iew:

ACWA Power’s Asset Management team has the responsibility to monitor and report on the asset portfolio’s management, O&M (including HSE) and statutory compliance. A schedule of audits and site visits is developed in coordination with the corporate Internal Audit team to avoid duplication and maximizing resources. All audits are followed with a detailed report of findings, conclusions and recommendations that are then monitored and tracked to closure. In parallel to the audit program is the monthly HSE performance monitoring and reporting procedure that provides regular updates on performance and issues and a monthly summary is provided to the Leadership Team. HSE performance statistics are compiled and analyzed monthly. Each site provides a report to its management team and the relevant corporate head office. ACWA Power’s corporate HSE collate the site and regional office reports into a single database. HSE performance data are included in the monthly Asset Management report that is circulated to ACWA Power’s leadership team. As part of the annual corporate report, ACWA Power’s E&S sustainability performance is published on ACWA Power’s website: http://www.acwapower.com/investor-relations.html.



ACWA Power’s E&S impact assessment and E&S audit cover compliance with IFC Performance Standards, including PS4 (Community Health, Safety, and Security), PS5 (Land Acquisition and Involuntary Resettlement), PS6 (Biodiversity Conservation and Sustainable Management of Living Natural Resources), PS7 (Indigenous Peoples) and PS8 (Cultural Heritage). With regard to PS4, the operation facilities of ACWA Power in Saudi Arabia are situated within an outer cordon of national security. The inner perimeter fence is secured by contract security personnel (non-armed). Where armed security personnel are used in facilities other than Saudi Arabia, ACWA Power instructs the personnel about the adequate use of arms to minimize impacts on nearby villagers if any. With respect to PS5, ACWA Power develops a plant in response to Request for Proposal, and therefore land acquisition is not conducted by ACWA Power. ACWA Power is aware of the PS5 requirements regarding Government led resettlement, and takes necessary actions where relevant to ensure that the requirements of PS5 are met. ACWA Power does not have any pending E&S issues related to PS4 through PS8 at any of its operational asserts or projects currently under development. As part of the agreed ESAP, the Company will strengthen its existing HSE procedures to document procedures to address specific requirements under PS4 (security personnel management), PS5 (general land acquisition and government led resettlement), PS 6 (biodiversity conservation and management approach), PS7 (indigenous peoples management procedures), and PS8 (chance-find procedures during construction) to ensure full alignment with IFC standards.

Working Conditions and Management of Worker Relationship:

ACWA Power currently has about 150 employees. In addition, NOMAC, its O&M service provider, has approximately 800 employees, and CEGCO (ACWA Power’s Jordanian electricity generation company) has about 1,040 employees. At any given time, moreover, several thousand construction workers from EPCs and their subcontractors are typically working at ACWA Power project sites that are under construction in various countries. ACWA Power has recently updated its Human Resources (HR) policies. These are compliant with national law in each of the countries where they operate and in line with IFC Performance Standard 2. The company provides employees with documented information about their statutory rights, working conditions and benefits through their employment contract and through the HR policies. ACWA Power also requires all of its contractors to follow Performance Standard 2, including protection of migrant construction workers.



With the exception of CEGCO, ACWA Power does not operate under any collective bargaining agreement. At CEGCO, the agreement is with the General Electricity Worker Union, and all of employees, whether members of the union or not, are covered by the collective bargaining agreement. UAE and Saudi Arabia law both prohibit the formation and/or membership of unions. To ensure that workers have a mechanism for expressing concerns about working conditions or other aspects of their employment the company has a whistleblowing process and encourages employees to use that where they see any wrong-doing. Employees are able to formally raise grievances with their management and simultaneously with ACWA Power’s People and Infrastructure (P&I) team function to ensure any grievances are heard quickly.



ACWA Power has an explicit commitment to employ the best people to do the work in question, irrespective of sex, race, or any personal characteristics. The company does not employ child labor or forced labor and requires its EPC and O&M contractors to adopt this policy. ACWA Power corporate is growing and its core team is expected to increase by 30% in a couple of years to keep up with business growth. CEGCO is the only ACWA Power subsidiary that is considering collective dismissals in light of the Jordanian national utility not extending a number of Power Purchase Agreements (PPAs). Several sites will be affected and the reduction in staff is envisaged to be between 10 and 15% which is in line with the reduction in generating capacity. A decommissioning plan (for the old facilities of which PPAs will not be extended) has been developed including legal and E&S considerations, including retrenchment of people. ACWA Power plans to implement the decommissioning plan in full consultation with CEGCO’s labor union. As mentioned above under PS1, the company has a grievance procedure supported by an anonymous telephone hotline available at http://www.complianceline.ethic
spoint.com to seek help or report a violation. This mechanism is used to ensure that labor and working condition related issues may be raised by any stakeholders, including those who wish to remain anonymous.



ACWA Power aims to employ local personnel where possible as it leads to longer term stability. The company established a vocational training institute, the Higher Institute for Water and Power (HIWPT) (http://www.hiwpt.edu.sa/EDefault.sxps) in Rabigh, Saudi Arabia, to support and enable high school graduates to join the power and water sector. Currently there are more than 600 trainees moving through the 3 year program and each of them already has guaranteed employment with an industry partner.



Occupational Health and Safety:

ACWA Power’s and the invested companies’ occupational health and safety performance is disclosed as part of the HSE performance summary in ACWA Power’s annual reports. The company sets occupational health and safety Performance Targets (for example, reportable injury rate targets for office, production site, and construction site) based on European benchmark data. Due to the large scale constructions activities ongoing at ACWA Power’s several construction sites, over 20 million hours per year are worked during the last three years (2011-2013). One fatality occurred in 2011, but overall occupational health and safety performance (such as Reportable Injury Rate or Reportable Incidents Rate) is on par or better than European average, which is reflected in the company’s Performance Targets.

Resource Efficiency:

ACWA Power’s electricity and water plant configurations can be categorized as (i) electricity generating plants (steam power plants, or combined cycle gas turbine (CCGT) plants); (ii) electricity plus water producing plants (using thermal based desalination processes); (iii) electricity plus water producing plants (using Reverse Osmosis), (iv) water producing plants (based on Reverse Osmosis); and (v) electricity, steam (for industrial use) and water producing plants. ACWA Power designs power and water (and in some cases steam as well) producing systems to achieve high energy utilization efficiency, high reliability, and to meet the specifications of the Request for Proposals. Plants that generate both electricity and water (through thermal based systems such as Multi-Effect Desalination [MED] or Multi-Stage Flash [MSF]) have a 2-3% better energy utilization efficiency (depending on the capacity of ED/MSF) compared with typical new electricity-only power plants. As part of the O&M management, ACWA Power monitors energy utilization efficiency of each plant.



The power and desalination industry is a significant emitter of CO2. ACWA Power addresses this challenge in two ways: the first is to specify the most efficient plant practicable to reduce CO2 emissions per unit of electricity and/or water produced, and the second is through establishing a corporate target of between 5% to 10% of total electricity generated from renewable sources by 2020. ACWA Power is operating/developing both Photovoltaic (PV) and Concentrated Solar Power (CSP) plants, partly to achieve this target but also to gain operational expertise of solar power generation considering the large potential of solar power development in Saudi Arabia.



ACWA Power monitors corporate CO2 emissions in accordance with the scope boundaries and guidance published by the GHG Protocol and the GRI. The CO2 emissions data are published every year as part of the HSE performance section of corporate annual reports. In 2012, the company’s CO2 emissions totaled 11 million tons of CO2, of which 99.97 % was from the company’s investment in power generation and water desalination production facilities. ACWA Power monitors specific CO2 emissions performance (CO2 emissions per unit of electricity and/or water produced) to analyze the overall corporate performance aiming to identify opportunities for improvement.



Controlling and minimizing water consumption is part of the overall O&M and business plan. Water consumed on site that could have been exported for sale is understood to be an important KPI that is measured and monitored by the management team.



Pollution Prevention:

Conventional air pollutants such as sulfur dioxides, nitrogen oxides (NOx) and particulates from electricity and desalination plants are controlled to meet the emission standards of the host country and the IFC/World Bank Group EHS guideline limits. Plants fueled by Heavy Fuel Oil and loc
ated at the coast in Saudi Arabia are equipped with seawater Flue Gas Desulfurization (FGD) to reduce sulfur dioxide emissions. NOx emissions are controlled by low NOx burners (boilers) or low NOx combustors (gas turbines). Plants located at the coast use a once-through cooling system. E&S impact assessments conducted on those plants included detailed thermal discharge modeling to design the intake and outfall structure such as to minimize impacts on the marine environment. Emission data summaries of ACWA Power’s assets show that their emission levels generally meet or exceed the IFC/World Bank Group EHS Guidelines limits for these parameters.



All sites have waste management procedures for controlling and minimizing wastes. Where possible waste and scrap is recycled rather than sent to landfill due to the economic and environmental benefits. Waste generation is monitored and reported as part of the monthly suite of HSE KPIs.

For each project, as part of the E&S impact assessment, a process of stakeholder engagement takes place to ensure that project affected people are consulted and informed, in line with IFC Performance Standards. ACWA Power has a grievance procedure supported by an anonymous telephone hotline available online at http://www.complianceline.ethicspoint.com or by phone at +1-503-597-4327 (at prompt dial 855-575-4202) to seek help or report a violation. This facility is available to internal and external parties. In addition, aggrieved external parties can use the “contact us” link on ACWA Power’s website to report and raise community related issues.
As described under PS1, ACWA Power’s EHS performance is published every year as part of its corporate annual reports available at http://www.acwapower.com/investor-relations.html. For each facility that ACWA Power invests in, relevant stakeholder engagement activities are conducted as part of the project’s E&S impact assessment process.

Corporate level and specific project level E&S information can be obtained from ACWA Power contact:
Mr Michael Nates
Sustainability Director
ACWA Power
22nd Floor, Nassima Tower
Sheikh Zayed Road
P.O. Box 30582, Dubai, UAE
Tel: +971-4-5090-555
Email: mailto:mnates@acwapower.com
http://www.acwapower.com

Broad Community Support is not applicable for this project

ACWA Equity(33736) Supervision Disclosure Snapshot – Version 2
Description	Anticipated Completion Date	Status	Comments	Completion Date
ACWA Power’s current E&S policy documents are focused on HSE aspects. ACWA Power will work to make them fully consistent with all elements of IFC Performance Standards.	31-Mar-2014	Completed	Completed	4/30/2014
ACWA Power will strengthen the existing corporate HSE procedures to document procedures to address specific requirements under PS4 (security personnel management), PS5 (general land acquisition and government led resettlement), PS 6 (biodiversity conservation and management approach), PS7 (indigenous peoples management procedures), and PS8 (chance-find procedures during construction).	31-Mar-2014	Completed	Completed	4/30/2014
As part of each project’s E&S impact assessment, ACWA Power ensures that stakeholder engagement is conducted in line with IFC Performance Standards through project’s Environmental and Social Management Plan and Stakeholder Engagement Plan. The company will strengthen the existing corporate HSE procedures to document how the each of its projects follow PS1 requirements on stakeholder engagement, i.e. identify key stakeholders, implement stakeholder engagement plans for affected communities, disclose information appropriately, consult appropriately, undertake Informed Consultation and Participation in more complex project situations and report to affected communities on an ongoing basis on E&S action plan implementation.	31-Mar-2014	Completed	Completed	5/31/2014