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
PS 4 – Community Health, Safety and Security
PS 5 – Land Acquisition and Involuntary Resettlement
If IFC’s investment proceeds, IFC will periodically review the the project’s ongoing compliance with the Performance Standards

The proposed investment is a Category B project because the environmental and social impacts that may result from constructing and operating these solar power generation and transmission facilities are limited and can be avoided or mitigated by adhering to generally recognized good practices and design criteria. The EIAs report that environmental and social impacts and risks are insignificant-to-moderate. No new access roads will be built, for the most part the transmission lines will use existing public right-of-ways, and land acquisition and involuntary resettlement will be minimal. The three projects are located within modified habitat, mostly composed of pasture lands and annual crops, and patches of dry forest and secondary vegetation; therefore PS6 on Biodiversity Conservation and Sustainable Management of Living Natural Resource is not considered applicable. No Indigenous Peoples or territories are located within the direct or indirect area of influence of the project; therefore PS7 on Indigenous Peoples is also not applicable. The project area does not have any cultural or historical significance, nor is located at a suspected archeological area, thus PS8 on Cultural Heritage is not applicable. As a precautionary measure, local authorities requested project developers to perform an archeological survey and recovery plan at both sites. This survey will be performed prior to the commencement of any land clearance and a Chance Find Procedure will be in placed prior to commencement of any excavation.

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.

Environmental and Social Assessment: The three projects were developed by two independent entrepreneurs, one for Pacifico I and another one for Choluteca I and II. In accordance with local legislation, these developers engaged qualified environmental and social consulting firms to prepare the EIAs for the three projects. The EIA for the Pacifico I was awarded an environmental license (Number 002-2014) and has an approved operations contract 2013-LA-00405. The EIA for the Choluteca I & II have been finalized and are expected to obtain environmental licenses and operations contracts during 3Q2014.

During appraisal it was noted that some of the environmental and construction approval licenses and operations contracts referred to features not appropriate for solar projects. Also the EIAs make reference to a different photovoltaic technology from the one planned to be used by SunEdison on this project. Even though these are administrative mistakes with no environmental and social significance, they pose a legal liability for the project. As part of the Environmental and Social Action Plan (ESAP), the company shall assure the documentation is appropriately amended to reflect the features of these projects.

The studies followed the terms of reference (ToR) to comply with requirements of the Secretaria de Recursos Naturales y Ambiente (SERNA). The EIAs process demonstrated that environmental and social impacts and risks are moderate in nature and for the most part temporary. During construction these impacts include: (a) land acquisition of approximately 3 properties and resettlement of 5 families as a result of the expansion of the Santa Lucia substation, (b) lease of land from 3 private owners to install the photovoltaic yards and a segment of the transmission line, (c) limited vegetation clearance of patches of low dry forest as a result of site preparation, (d) air pollution, reduction in air quality, and increased ambient noise as a result of construction traffic and the exhaust emissions from construction traffic and heavy equipment, (e) potential contamination of surface waters from construction and accidental oil/fuel spills, (f) generation of solid and hazardous construction waste, (g) influx of construction workers, (h) potential community health and risks related to construction traffic and panel transportation on public highways, and (i) occupational health and safety risks to construction workers. During operation, the main environmental and social concerns relate to (j) pressures over water resources as approximately 0.22 litters/month of water are needed to maintain and clean each solar panel module, resulting on an estimated use of 720 m3 per year, (k) permanent landscape modification, and (l) community safety risks associated with the permanent presence of security forces. All these impacts can be mitigated with established pollution prevention and control technologies and by applying good international industry environmental and so
cial management practices (GIIP), such as those required under IFC Performance Standards and applicable World Bank Group EHS Guidelines.

Even though these EIAs were comprehensive, during appraisal IFC found several gaps vis-à-vis the Performance Standards that will be mitigated per the agreed ESAP. These include: lack of (i) an assessment of potential project impacts on water resources, i.e. water needed for panel cleaning vis-à-vis existing and future competing water users, (ii) detailed land acquisition, easement, and involuntary resettlement plan, and (iii) a consolidated SunEdison-led stakeholder engagement process and management plan. In addition, considering that approximately 7 other projects are being developed in the same area of Choluteca, (iv) potential cumulative impacts will be assessed and management strategies, if necessary, shall be designed (e.g. competing water uses / availability, landscape impacts, stakeholder consultation and engagement, and presence and use of security forces).

During appraisal, the IFC also identified that although the project is around 40 km from the coast, it falls into a proposed marine protected area named Rio Negro Biological Reserve which was sponsored by Centro Agronómico Tropical de Investigación y Enseñanza (CATIE) and the International Union for Conservation of Nature (IUCN) in 1987. The specific reason why this area was proposed to be protected and the ecological values it was aiming to protect are unknown to the IFC and the company. SunEdison will coordinate with other project sponsors, CATIE, IUCN, IFC and the government to better understand the conservation objectives of the proposed biological reserve, and evaluate whether any additional conservation-related actions need to be included in the project’s Environmental Management Plan (EMP).

Environmental and Social Management System and Organization: Environmental and social sustainability are at the core of SunEdison’s corporate mission and vision. SunEdison’s management is committed to adopting and implementing a robust Environmental, Social, Health, and Safety Management System (ESHS-MS) for the project based on the Honduran regulations, IFC’s Performance Standards, relevant WBG Environmental, Health and Safety (EHS) Guidelines, and SunEdison’s corporate policies and guidelines. At the corporate level SunEdison has an ESHS-MS designed in line with internationally recognized ESHS-MS standards (i.e. ISO 14000 and OHSAS 18000) which includes (a) ESHS Policy, (b) global organizational structure, (c) procedures for identifying social and environmental risks and impacts; (d) development and implementation of environmental and social management plans (ESMP); (e) monitoring and internal audits; and (e) development and implementation of a community engagement framework, including a grievance mechanism. Per the ESAP, and as SunEdison has done in previous deals financed by the IFC in other countries, the corporate ESHS-MS shall be adapted to the
local context of the project, adding to them all the local labour requirements. Additionally, SunEdison has also agreed to develop a non-technical summary (NTS) consolidating the three projects as one in order to define a single operating ESHS management unit and set of programs to be followed during construction and operations.

To ensure sound ESHS performance of contractors, the company has developed detailed procedures including contractual clauses about ESHS compliance, site specific safety plans, use of personnel protection equipment (PPE), work permits, report of incidents/accidents, and compliance with local labor laws, among others. In addition, construction contractors will be required to have on-site occupational health and safety (OHS) supervisors for their operations and the company will conduct periodic ESHS performance evaluations of the contractor to assess their performance.

SunEdison will dedicate qualified personnel to handle the ESHS aspects of its operations. SunEdison has a Global ESHS Lead, a Regional ESHS Lead for Latin America and will hire a local ESHS Officer in Honduras to head the ESHS management unit and be responsible for the appropriate application of the ESHS-MS during project construction and operations. In addition, as noted in the ESAP, SunEdison shall ensure that the project has a qualified employee in charge of community engagement activities, including the appropriate implementation of an effective grievance mechanism as well as any community outreach initiatives to be implemented in the vicinity of its operations.

Training Monitoring, and Reporting: SunEdison will periodically conduct ESHS training for all its employees and contractors on aspects such as safety audits, job related risks, hazardous materials, fire prevention, and proper use and disposal of residues and waste products. The company will apply its established monitoring program to assess the ESHS performance of its operations, including periodic visits/ audits from the Regional ESHS Lead for Latin America. The Honduras ESHS officer will assure compliance with the local legislation and keep record of all relevant air emissions, noise, discharges, OHS statistics, solid and hazardous waste generated at site, as well as water usage. SunEdison Honduras will submit annual environmental and social performance reports to regulators, lenders, and investors, as well as to its corporate Regional ESHS Lead for Latin America.

Human Resource Policy and Management: SunEdison is committed to implement a Human Resources (HR) policy and procedures based on the existing corporate SunEdison’s Employee Handbook, ESHS-MS and the IFC PS2 requirements. The HR Policy, procedures, and a the relevant sections of the ESHS-MS, specifically include provisions related to non-discrimination and equal opportunity, wages and benefits, no engagement in forced or child labor, and adequate working and living conditions. These procedures will be appropriately communicated to all employees.

Per the ESAP, the company will customize a Contractor Monitoring Procedure and an Internal Grievance Mechanism, based on SunEdison existing corporate procedures, to meet relevant Honduran labor laws and IFC PS2. The company will establish a worker’s grievance mechanism defining the channels available to submit the grievances (i.e., mail, phone, verbal report to immediate supervisor/reporting authority; etc.) and will maintain a database with information regarding grievances outcomes.

It is expected that the proposed project will generate about 230 jobs per sub-project during the construction peak. The majority of non-skilled workers are anticipated to be locally hired from the surrounding villages. The project will generate an average workforce of 15 full time jobs per project during the operation phase. It is anticipated that the workers will live in the community closest the project site and that the SunEdison will be responsible for their transportation. No construction camps will be built.

Occupational Health and Safety (OHS): The Company will establish an Occupational, Health and Safety (OHS) management system based on SunEdison’s corporate ESHS–MS which includes a zero accident policy. Key safety measures will include: ear protection when workers noise exposure is 85 dBA or more, equipment enclosures and buffers wherever noise levels are above 90 dBA, preventive equipment maintenance, planning daytime activity for heavy vehicles and construction machinery activity, use of personal protection equipment (PPE), daily safety chats and permanent training. The company will also focus on the prevention of risks related to work at heights, work with live power lines and equipment, fire hazards, exposure to chemicals, and exposure to electromagnetic fields.

This is a renewable energy project and it responds to a need to increase and diversify the energy capacity and matrix in Honduras to new, clean, and renewable sources of energy, reducing a dependence on fossil fuels. The project is expected to reduce the generation of CO2 emissions from energy generation and electricity use in Honduras by 129,633 tons CO2-eq per year.

The main pollution and natural resources related environmental impacts of the project will occur during the construction phase, which are: land clearance and removing of vegetation, noise and changes in air quality caused (dust and particulates) due to construction and road traffic, wastewater disposal, and waste management and disposal. During operation, the main impacts will be due to water use, disposal, and potential conflict of with competing domestic, agricultural, livestock, and other commercial activities in the area.

Water and wastewater: The water requirements for construction will be supplied by truck. The water for human consumption for both construction and operation phases will be supplied by bottled water. During operations the company estimates a use of 720 m³/year to maintain and clean the solar panels. As a requirement to IFC investment, and per the ESAP, the company will assess existing sources of water, and provide a comprehensive water balance to assure that there is sufficient water to satisfy project operational needs, without jeopardizing its replenishment (e.g. if water wells are dug on site), as well as assuring there will be enough water for existing and future domestic, agricultural and/or other foreseeable industrial uses (e.g. other photovoltaic project in the region).

The construction phase will generate only domestic sewage. The operation phase will generate domestic waters and discarded panel washing water. The domestic wastewaters to be generated will be collected and treated in septic tanks. The sludge produced will be removed by an authorized specialized company. Typically, minimal amounts of wastewater result from the panel cleaning activities, and wastewater falls to the ground beneath the photovoltaic modules, and does not need to be treated, since it just contains dust and particulate material that deposits on the panels.

Air quality: The main source of emissions (SO2, NOX and particulate matter) during the construction phase relates to the movement of equipment and vehicles. Prevention measures during this phase will include sprinkling of water on roads, periodic checks for proper vehicles and equipment maintenance. The impact on the air quality during the operation phase is very limited since the operation does not generate air emissions.

Community Health and Safety: The project will have low negative impacts to the nearby communities. Any potential induced influx to nearby areas resulting from the construction phase will be due to the expectation of new employment opportunities. However, it is anticipated that this impact will be temporal given the short duration of the construction phase which will take approximately 6 months. In addition, the EPC contractor will provide transportation for its workers who will be living in nearby communities. Traffic volumes to transport workers, equipment, and materials to the construction site are not estimated to be considerable and the company along with the contractor will establish the optimum transportation routes, traffic management measures, and appropriate site access provisions that will reduce risks and impacts to nearby communities.

The company will develop an Emergency Response Plan (ERP) for the construction and operation phases, as indicated in the ESAP. SunEdison will develop dedicated emergency response training programs for all new employees as well as in-house and off-site training for first responders. The plan will also include the communication to and training of the communities related to response to emergencies.

Security: Preliminary information obtained during appraisal is that SunEdison will hire a private security company and develop a security plan to assure that employees, sub-contractors, as well as physical assets are safe, under surveillance, and on a controlled environment. Security forces are expected to be armed. The company has a Global Security Manager, who is in charge of assessing the security risk of all their projects around the world. Given the inherent security risks prevailing in Honduras, in alignment with SunEdison practices and in compliance with this Performance Standard, as a requirement to IFC’s investment, SunEdison will perform a Security Risk Assessment with a qualified international security risks firm. As noted in the ESAP, this assessment shall result in a comprehensive site-specific Security Management Plan, that will be (a) commensurate to the security risks, (b) aligned with the Voluntary Principles on Security and Human Rights, (c) describe security risk and detailed response procedures, and (d) assure that all security personnel, but especially those who will bear arms, are trained and operate consistently with such principles. This plan will also include an initial awareness workshop and site briefing for all employees.

Community engagement is a key pillar of SunEdison’s Corporate ESHS Policy. In compliance with the EIA Honduras requirement, the developers conducted a public consultation / socialization process (Proceso de Socialización a Cabildo Abierto) with relevant stakeholder, on 31 August 2013 and on 12 September 2013, for Pacifico I and Choluteca I and II, respectively.
However, since SunEdison has only recently acquired these three projects, as part of the ESAP, it will develop and implement a Stakeholder Engagement Plan (SEP) in alignment with their own global policies, good industry international practices, and IFC Performance Standards 1 requirements. This SEP will include (a) stakeholder identification and analysis; (b) establish an effective and transparent communication and engagement process and (c) an external grievance mechanism. The engagement process shall assure that all those potentially affected by the project and other stakeholders, understand the project design, as well as it potential environmental and social impacts and risks, and will address and effectively respond to their concerns. The company will design a procedure to receive, register, redress, and monitor community grievances, for its own operations. This procedure will be designed to be easily accessible, efficient, and to respond to the grievances in a culturally appropriate way. The complaints will be handled by a local community liaison officer to be appointed for the project. For the construction phase, the contractors will develop and implement grievance mechanisms to address any issues raised related to the contractors’ activities. The company will supervise the effective resolution of grievances raised during this phase.

Francisco Poblador
Regional Manager
Calle de Alcalá, 44, 28014 Madrid, España
+34 915 23 00 76
Fax:+34 911 814 123
http://www.sunedison.com

Broad Community Support is not applicable for this project

SunEdison HON3(34975) Supervision Disclosure Snapshot – Version 2
Description	Anticipated Completion Date	Status	Comments	Completion Date
SunEdison will work with the authorities to obtain any remaining licenses and contracts and amend all legal permits and licenses to reflect actual project components and technology.	01-Oct-2014	Completed	Completed	10/1/2014
SunEdison shall develop a Non-Technical Summary that will consolidate the relevant information of the three projects. This NTS shall include an assessment of potential cumulative impacts and define those mitigation measures to be included as integral components of the project’s ESMP, and those were the SunEdison will use its best effort to manage in a collaborative fashion with other neighboring solar power project developers (e.g. water management plan, joint stakeholder communication and engagement management plan, landscape, and use of security forces, among others)	15-Sep-2014	Completed	Completed	3/1/2015
SunEdison shall adapt its Global ESHS policies and procedures to make them project specific, consolidating the operations of the three plants. SunEdison will develop a project-specific Environmental, Social and Occupational Health and Safety Management System (ESHS-MS) for the construction and operation phase that include monitoring actions, frequency of monitoring, performance indicators and the responsible entity; and will ensure that the EPC contractor and project personnel are adequately trained to undertake ESHS activities. The ESMS will include a Contractor Monitoring Procedure, and an Emergency Response Plan (ERP) for construction and operation phases. The ERP will have dedicated emergency response training programs for all new employees as well as in-house and off-site training for first responders. The plan will also include the communication to and training of the communities related to response to emergencies. SunEdison shall appropriate staff the ESHS unit, including as a minimum an on-site ESHS focal point during construction, and support staff; including a community liaison and OHS officer.	01-Oct-2014	Completed	Completed	3/27/2015
SunEdison will adapt to make project specific its Human Resources Policy and Procedures in line with IFC’s Performance Standard 2 and with Honduran labor laws; and will ensure that the Human Resource Policy and Procedures as developed by EPC contractor / O&M provider are consistent with commitments made in their own Human Resources related documents. SunEdison will develop and make available a grievance mechanism for workers.	01-Jan-2015	Completed	Completed	1/1/2105
SunEdison will develop a Water Management Plan, which includes an assessment and review of alternative cleaning methods, including the use of dry brush cleaning. The plan will provide a water balance, and justification for the extent of water usage on the site considering both environmental and economic factors. SunEdison will perform an assessment of the water requirements during operations and its effects on competing uses. SunEdison will use its best effort to coordinate a sustainable water use with other developers, agricultural and livestock producers and other relevant nearby users.	01-Jun-2015	Completed	Completed	6/1/2016
SunEdison will undertake a Security Risk Assessment for the project and will develop a Security Management Plan (SMP), including a training module for security staff. This SMP shall be aligned with the Voluntary Principles on Security and Human Rights and with the requirements of Performance Standard 4 (paragraphs 12, 13 & 14).	01-Oct-2014	Completed	Completed	4/1/2015
SunEdison will perform a socio-economic baseline assessment and develop a Land Acquisition, Easement and Livelihood Restoration Plan for those affected by the Sta. Lucia substation’s expansion, in compliance with PS5.	31-Jan-2015	Completed	Completed	3/25/2015
SunEdison will develop a Stakeholder Communication and Engagement Plan (SEP) which shall include a community grievance mechanism.	01-Jan-2015	Completed	Completed	3/27/2015
SunEdison will coordinate with other project sponsors, CATIE, IUCN, IFC and the government to evaluate whether any additional conservation-related actions need to be included in the project Environmental Management Plan (EMP).	01-Oct-2014	Completed	Completed	12/3/2014