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
If IFC’s investment proceeds, IFC will periodically review the the project’s ongoing compliance with the Performance Standards
The project will be developed on pooled private barren/agricultural land (as per revenue records), a large part of which have reportedly been aggregated from investors who have either pooled this land around 4 to 5 years back due to an airport announced in this location by the government and later cancelled. Similarly private land required for the construction of the transmission line (either pole/tower site and/or for the line right-of-way (RoW) will be leased from individual land owners through a negotiated settlement. No expropriation of land is anticipated and a lump sum compensation based on the agreement will be paid to the affected land owners. No physical displacement will result from the setting up of the project and its associated utilities. PS5 (Land Acquisition and Involuntary Resettlement) will therefore be not applicable to the project.

There are no ecologically sensitive zones/areas within a 10 km radius of the project site. No forest land will be involved in the RoW of the transmission corridor proposed for the project. There is no forest/protected area being impacted by the project and the related planned developments and no significant adverse impact on fauna is expected. Hence, PS6 (Biodiversity Conservation and Sustainable Management of Living Resources) is not considered applicable to the project.

With regard to PS7 (Indigenous Peoples), the project and its activities will not impact any indigenous people/community. No tribal land is being taken for the development of the project and its associated utilities. Hence PS 7 is not considered applicable to the project.

No cultural heritage is expected to be adversely impacted as the site does not contain any archaeological sites, or any structure that have paleontological, historical, cultural, artistic or religious values. No unique natural features, tangible or intangible are present in the project area which could be impacted by the project and its activities. Hence, PS8 (Cultural heritage) is not applicable to the project. However, the project will, as a part of its E&S procedures, implement a Chance Find Procedure and train its staff with respect to the same.

The proposed IFC loan to the project is a category B project 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. Potential impacts in construction activities besides being mitigable are likely to be limited to the project site; be of short term duration; and are likely to have no impacts on environmentally sensitive areas. Further, it is possible to readily design and implement engineering and management measures to mitigate adverse impacts during construction and operations. The company will manage its environmental and social performance in accordance with applicable local laws and regulations and international standards, including IFC’s Performance Standards on Social and Environmental Sustainability.

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.

Azure has in place a Social, Environment and Health & Safety policy and has developed and implemented a corporate Social, Environment and Health & Safety Management System (SEHSMS). Azure is committed to ensure that its individual projects (whether owned directly or through SPVs) are constructed and operated in a manner consistent with host country requirements, IFC’s Performance Standards and good international industry practice (GIIP) including those detailed in the relevant parts of applicable IFC’s Environmental, Health and Safety Guidelines. Key elements of SEHSMS include the following:



Environmental and Social Impact Assessment: Azure’s SEHSMS includes policies and procedures that require new projects to undertake an environmental and social impact assessment (ESIA) before procurement of land in order to understand the potential impacts from site selection, site preparation, construction and operation consistent with IFC Performance Standards and national regulations as applicable. An Environmental and Social Management Plan (ESMP) will be developed outlining the measures that need to be implemented by the company for avoiding or reducing the impacts identified during the study.



Accordingly, the company has as per the guidelines/provisions of the corporate level SEHSMS, undertaken a third party led ESIA and will develop and implement a project specific environment and social management system (ESMS) for the construction and operation phases) based on a) the outcome of the ESIA/ESMP and b) in accordance with the requirement of its corporate SEHSMS (refer to ESAP item #1). The ESIA (dated June 2015) has assessed impacts and designed appropriate avoidance and mitigation measures for project related risks and impacts across the project life cycle in accordance with IFC Performance Standards and GIIP. The ESIA has assessed that given the lack of sensitive receptors in the area, cumulative impacts are not envisaged. The ESIA includes an Environment and Social Management Plan (ESMP) that outlines a) the avoidance & mitigation measures for the identified adverse impacts, b) monitoring and reporting framework c) responsibilities and d) an organizational structure to implement the ESMP. The ESIA also outlines specific framework management plans covering waste, traffic, health & safety, emergency preparedness/response, construction labour camp management, community engagement and grievance redress that will be implemented by the project. The company will contractually require the construction contractor/operator to ensure that the avoidance and mitigation measures and plans outlined in the ESIA are implemented during project construction and operation phase.



Social, Environmental, Health and Safety procedures (Standard Operating Procedures): Azure’s SEHMS includes Standard Operating Procedures (SOPs) on site selection, community engagement, land procurement and compensation, chance find, site preparation, waste management, emergency manag
ement, occupational health and safety management, chemical spill control and response and incident reporting, investigation and analysis. Each SOP includes details on purpose, applicable project phase, applicable IFC Performance Standard, applicable national regulation and standard, procedure and the responsibilities. It is expected that applicable SOPs will be implemented for this project.



Organizational capacity: The SEHMS includes the specific roles and responsibilities of the top-manager and Safety, Health, Environment and Social (SHES) Head for implementing the Social, Environmental, Health and Management System. The SHES Head shall be responsible for implementation of SEHMS across the project site and for conducting or coordinating with independent agencies for carrying out social and environmental assessment of the project and implementing project-specific social and environmental management plans.



Training: Azure’s SEHMS includes provision for conduct of training programmes to raise the awareness of the project staff and workers about the potential social and environmental impacts and health and safety risks associated with their activities and to communicate the standard operating procedures and the individual or departmental responsibilities for implementing the same.



Inspections and audits: The SEHMS includes provision for regular inspection of activities during construction and operation phases so as to identify any violations of the applicable Standard Operating Procedures and enforcement of immediate corrective action. Responsibility of daily inspection has been assigned to the Site Supervisor / Engineer who in turn will be trained by the SEHS Coordinator. Also monthly internal audits will be conducted during the construction and operation phases which will enable assessment of the status of implementation of the Social, Environmental, Health and Safety Management System. The audits will consider health and safety, waste management, chemical storage and handling, worker’s accommodation standards and emergency preparedness at the project site.



Documentation: Various documents that will be maintained include the ESIA report including the ESMP, internal audit report, regulatory and other permits related to the project, incident reporting, investigation and analysis sheets, details of trainings and capacity building programs, such as training materials and attendance sheets; and agreements with public/private infrastructure facilities for project related services.



Management review: The top management will review the monthly audit reports and Annual Monitoring Framework to assess the status of implementation of the system at the project site.



External Reporting: The SEHS Coordinator will report to all the relevant stakeholders of the company in the form of Annual Monitoring Report (AMR) to IFC, compliance reports to State Pollution Control Boards at a frequency required by the Board to convey compliance to condit
ions stipulated in the No Objection Certificates for the project; and compliance reports for any specific or additional approvals obtained.



The company will, ensure adherence to IFC Performance Standards as applicable to its project and operations by implementing the mitigation, monitoring and management measures outlined in the ESIA. This will be done by including the E&S provisions in the contractual agreement with EPC contractor / O&M operator and putting in place a robust oversight mechanism (deputing personnel, regular monitoring, internal audits and reporting). The company will contractually require the EPC contractor/O&M operator to put in place a social and environmental organization consisting of qualified E&S personnel with appropriate responsibility allocation to implement/oversee/monitor a) the implementation of the ESMP, b) community engagement and grievance redress system/mechanism, c) performance of contractors on labour and health & safety aspects, d) regular training of employees and contractors, e) emergency preparedness and response, f) periodic monitoring social and environmental performance; (g) internal and third party audit; (i) management review; (j) and periodic reporting of E&S performance to the management. The contractor management plan detailed in the ESIA and including monitoring of legal compliance and adherence to laid out procedures will be implemented to ensure that E&S requirements are met.

Azure has already strengthened and implemented its HR systems in line with IFC PS 2 requirements as a result of previous transactions with IFC. The company’s HR policies and procedures will be made available to all employees and communicated at the time of employee induction.



During the construction phase which will span for about 4-5 months, the average manpower is estimated to be 250-300 while during peak construction period this number may go up to 850-1000. Although the project plans to utilize local workers during the construction phase, it also has back up plans for sourcing labour from outside the region in case the labour requirements are not met locally. To this effect, labor accommodation is planned to be set up during the construction phase of the project for certain specialized skilled workers of around 100 to 150 workers. Azure Power will ensure that adequate amenities are provided in the labour accommodation for construction workers including: adequate living/sleeping facilities and space per person; potable water that meets national standards; toilets, washing and cleaning facilities; canteen/mess or fuel for cooking; locker/storage facilities; and facilities for management and disposal of garbage, sewage and other waste. The company will periodically review and monitor the condition of the labour camps (refer to ESAP item #3).



During the operations phase, the company plans to engage 3 to 4 employees, primarily to oversee the plant operations. About 100 security staff are anticipated to be locally hired for the construction and operation phase. These staff is not expected to require any on-site accommodation, as they would be either already residing or staying in rented accommodation in the nearby villages/town as the connectivity is well developed.



The company will ensure that the EPC contractor/O&M operator fulfills its health & safety and labour related obligations/requirements. The company will require the EPC contractor to ensure usage of relevant personal protective equipment, implement work permit and incident/accident recording/reporting systems etc. The company will (apart from the periodic internal audit) engage a qualified third party to review/audit its labour, OHS and contractor management practices during the construction phase to assess compliance to aforesaid requirements (refer to ESAP item #4).



Also contractor management plan to be developed as a part of the ESIA and the relevant provisions of Azure’s HR policy and SEHSMS will be implemented for the project. The company will communicate with the contractors on its SEHSMS and HR policies and PS 2 requirements with respect to access to worker grievance mechanisms, health & safety, benefits and welfare provisions etc. To this effect it will plan provision of trainings and capacity building support to the contractors. The company, as a part of the contractor oversight procedures will need regular monitoring of compliance to the aforesaid guidelines/requir
ements and ensure that these are met. Internal audits and follow up on corrective actions will be undertaken to assess efficacy of the oversight system.

The project will contribute to GHG avoidance of approximately 181,895 tons of CO2 equivalent emissions per year beginning in FY2016-2017 (averaged for 10 year period). During the construction phase, short term temporary impacts on ambient air quality and noise levels may be expected due to increased traffic movement. The company will implement measures for management of excavated earth and construction debris and implement measures to minimize the fugitive dust emissions. The construction work will be carried out only during day time and no noise generating equipment will be operated at night. Waste generated will be segregated into recyclables (packing material, metal, cement bags, drums/carbuoys etc.) and biodegradable/inert waste and will be stored and disposed of to re-users or in appropriate authorized debris disposal areas. Hazardous wastes (used oils, waste/residual paint, oil/paint soaked rags/material, filters, empty oil/paint/chemical drum/barrels etc) are expected to be generated in small quantities and will be handled/used with appropriate care and personal protective equipment and disposed of through authorized agencies.



During the operation phase, no impact on ambient air quality and ambient noise is expected. The use of water will only be for domestic and drinking purposes and for washing of the panels (water requirement is estimated to be minimal – about 20-25 m3/day since dry brushing solutions will be incorporated). Water required will be sourced from authorized water tankers. Wastewater generated will be disposed of in septic tanks and soak pits provided at the site. No material impact on surface or groundwater resources is expected on account of the project. The company will ensure that the water made available to workers and employees’ meets national potable water quality norms. Hazardous materials (transformer oils and batteries etc) and hazardous wastes (used oils, waste/residual paint, oil/paint soaked rags/material, filters, empty chemical drum/barrels etc) are not expected to be generated in significant quantities during operation phase. The company will however make provisions for proper storage, handling and disposal of hazardous waste as per the requirement outlined including disposal of hazardous waste to authorized agency. Further, the company will ensure that transformers do not use PCB containing oils and that ozone depleting substances banned/phased out under Montreal Protocol are not used and use of pesticides, if any, should be in conformance with Performance Standard provisions. The other hazardous waste that would be generated during the operation phase includes broken panels which if not properly handled could lead to leaching of heavy metals. Azure will have arrangement with the suppliers of the solar panel to return the wastes (like broken panels). At the site (till the time the panels are picked up by the supplier) the broken solar panels will be stored in a locked container provided with concrete flo
oring.

The nearest community settlements are expected to be greater than 1.5 km from the project site. During the construction phase, an increase in traffic is expected and the company will implement mitigation measures for preventing the community risks due to traffic mainly on the Bellary – Hiriyur road. Some of the mitigation measures would include setting speed limits for the access roads, putting safety signage and ensuring illumination. At the construction site, the company will provide appropriate access control and barricading of excavated areas to prevent the risk of accidents.



The project will engage security personnel but they will not be armed. However, the company will ensure that: past records of security personnel employed are screened, security personnel have clear objectives and permissible actions laid out; security personnel are trained in avoidance of abusive conduct; security incidents are recorded, investigated and corrective action implemented; bona fide complaints against security personnel are investigated and appropriate disciplinary actions are implemented; and there is a grievance mechanism for aggrieved members of community or employees, in the event of a violation of the code for security personnel (refer to ESAP item #3).

Land for the project falls in Gollahalli, Kandikeri, Kaparhalli and Jadekunte villages in Chitradurga district of Karnataka state. The nearest community settlements are however expected to be located at a distance greater than 1.5 km from the project site. As a part of the ESIA, consultation was held with the land aggregator and some land sellers who have sold land or have agreement of sale with the project proponent, Panchayat Presidents and some Panchayat members and village development officers. Panchayat presidents and other members of the panchayat and land sellers are informed about the project.

The ESIA proposes a stakeholder engagement programme for the project. The two important elements of the programme are a) disclosure of the findings of the ESIA (especially the ESMP) to the community and b) implementation of the stakeholder engagement plan and the grievance redress mechanism proposed for the project (refer to ESAP item #2). The company will implement a plan for ongoing engagement with the stakeholders including consistent with requirements of PS 1 and delineated in the ESIA.

The company will implement the grievance redress plan prior to start of construction activity and constitute a grievance redress committee to look into any stakeholder concerns and grievances. Information about this committee and the grievance redress mechanism will be shared with the stakeholders through locally appropriate communication tools. The stakeholders will be encouraged to approach this committee with their concerns and suggestions. Minutes and proceedings of the meetings of this committee will be documented and shared with relevant stakeholders. The company also proposes to develop and implement appropriate community development programs in consultation with the affected communities.

Azure Power will, as part of its SEHSMS, implement a community engagement procedure in accordance with IFC’s Performance Standards. The formal community engagement process will include procedures for receiving and responding to community interest, information request and grievances on an ongoing basis. The company also proposes to develop and implement appropriate community development programs/corporate social responsibility initiatives in consultation with the affected communities.

The Company will make available on its website (http://www.azurepower.com) SEHS Policies, SEHS management system procedures and other SEHS information of relevance. The Company will also make available on its website, the measures it proposes to implement so as to conduct its business in accordance with IFC’s Performance Standards.

The company will locally disclose the social and environmental information including the ESIA for the project at the following locations:

Kandikere Panchayat office
Gollahalli and Kandikere villages
Hiriyur Taluku (Tehsil)
Chitradurga district
Karnataka
PIN – 577545

Sanekere Panchayat office
Kapparhalli & Jadekunte villages
Challakere Taluku (Tehsil)
Chitradurga district
Karnataka


Any queries and/or comments about the project may be directed to:

Manoj Mishra
Head- Corporate SHES
8, LSC, Pushp Vihar,
New Delhi -110062
India
Phone: +91 11 49409800/ +91 11 49409848

Broad Community Support is not applicable for this project

Title	Anticipated completion Date
Develop and implement a project specific ESMS for construction and operation phases covering (but not limited to) the impacts and mitigation measures delineated in the ESIA	04/01/2016
Disclose the ESIA and implement a community/stakeholder engagement and grievance redress process	12/31/2015
Provision of requisite amenities in the labour accommodation for construction workers and periodic review of the labour camps.	04/01/2016
Undertake a third party audit of EHS and labor related compliance	06/15/2016