Identification of Risks and Impacts: The international lenders and NREA initiated a Strategic Environmental and Social Assessment (SESA) for the entire Benban PV solar park with the objective of providing an overarching assessment of the environmental and social impacts of the Benban development.  The details of this assessment are included below (see Cumulative Impacts).  The SESA (dated December 2015) was approved by the government on 17 March 2016 and considered cumulative impacts with respect to the additional impacts expected beyond the development of a single power plant with individual developers responsible for defining and implementing site specific mitigations/recommendations as appropriate within their environmental management plans.  Due to the development of the SESA, the individual projects within the solar park have been categorized as requiring a Form B EIA by the Egyptian Environmental Affairs Agency (EEAA).  As a result, the SESA supported the EIA process for the project, resulted in a more consistent approach at the individual project level for the Form B EIA preparation, and reduced the need, and cost, for additional baselines.  It also removed the need for a project-specific consultation process. 

In order to address project-specific impact assessment requirements, the EIA for the project, dated March 2016, was prepared by a local consulting company (EcoConServ) in accordance with the Egyptian Environmental law no. 4 / 1994 amended by law no. 9 / 2009 and its executive regulations.  This EIA incorporated the findings and approval conditions of the SESA, and covered the construction, operation and decommissioning phases of the project.  This EIA is considered to largely meet the requirements of PS1 with any gaps to be met through the ESAP.  

Following development of the EIA, the project’s Form B was submitted on 12 April 2016 as part of FiT Round 1 and was approved by the EEAA, this approval remains applicable for FiT Round 2.  The approval contains conditions which are largely similar to the SESA approval conditions, and includes an additional requirement for PV panels to have contrasting edge colors to reduce avian impacts.  The sponsor has stated that all requirements described in the EEAA’s decision will be considered within the design and management of the project.

The approval of the Form B, together with the SESA approval, constitute the Environmental Permit required for the project.  The sponsor has addressed the gap between the local EIA and various lender requirements through the development of the Environmental and Social Due Diligence (ESDD) checklist/report, to specifically address the assessment of impacts in alignment with the PSs.  

As part of IFC’s involvement, the sponsor will ensure that ESHS risks and impacts identified in the EIA and in the permit requirements are appropriately addressed in the project’s ESHS MS.  As part of this, the ESHS Management Plan (ESHS MP) will be further developed into a clear plan of action for the identified risks/impacts with assigned responsibilities and deadlines.  This will also be implemented by the EPC Contractor and sub-contractors. 

Cumulative Impacts  :  As mentioned above, the SESA for the Benban PV solar park was prepared for NREA with funding from the European Bank for Reconstruction and Development (EBRD) in July 2015, in consultation with IFC.  The SESA concluded that the ESHS risks from individual solar developments at the Benban PV solar park could be adequately managed through standard application of good practices, but the cumulative impacts from several developments (39 plots) advancing in the same area at the same time could pose potential significant challenges and risks related primarily to traffic and transportation, occupational health and safety, accommodation, labor management, waste management, security and the management of stakeholder expectations from nearby local communities.  The SESA also concluded that in order to address these “common issues” for all developers, a coordinated aligned approach was needed.  It further noted opportunities for positive impacts related to engagement with the local communities and community investment efforts if carried out strategically and in a coordinated manner. 

Following close engagement by IFC and other Lenders with the various developers, the Benban Developers Association (BDA) was formed (and currently encompasses the participation of most of the developers) to enhance their collective efforts of tackling the key E&S risks for the Benban PV solar park in a coordinated manner.  The BDA was initially formed in 2016 in connection of Round 1 of the FiT, and then reactivated in 2017 in connection with Round 2.  This has led to the decision by the BDA, in coordination with the EETC and NREA, to appoint a FMC for the entire site and for this FMC to develop the various E&S management plans and strategies recommended in the SESA and provide construction services in line with IFC Performance Standards, EBRD Performance Requirements, and EIB Environmental and Social Standards.  This includes, but is not limited to the development of a Labor and Workers Relations Strategy, A Workers Accommodation Strategy, A Security Management Plan, a Traffic Risk Assessment and Management Plan, an Environmental, Health and Safety Plan and a Community Investment Strategy.  The FMC will also provide “mandatory” services to all developers, whether these are in the BDA or not, during construction related to site EHS management, traffic management, community stakeholder engagement and grievance management and waste management.  On labor management, the FMC will also be expected to be establishing offices in Benban and Fares to channel all local labor subcontracting for the various projects.  The sponsor, through the EPC JV,   is required to comply with all items outlined in the SESA as “common issues” and to coordinate with the FMC on these various action items as per   ESAP action item #1  .

Environmental & Social Management Systems  : The sponsor has developed a draft ESHS MS specific to the project, although currently generic in nature.  The document provides an overarching project specific ESHS policy; identifies environmental and social risks and impacts; outlines a framework for the development of specific management plans; and briefly outlines roles and responsibilities. These documents will be developed further and made more project-specific and comprehensive for the Benban PV solar park prior to construction per   ESAP action item #2  .  The project’s ESHS MS will consist of several Elements, Programs and Plans and Procedures including, among others, an E&S Policy and Health & Safety (H&S) Policy, an ESHS MP with monitoring actions, an overarching system for reporting and tracking non-compliances, and an organizational framework.  The ESHS MS will include an Emergency Preparedness and Response Plan, reflect the current project structure and arrangements, and include the implementation mechanism of the proposed actions and align with EPC contractor MS.  The project’s ESHS MS will also clearly set out the interface between the project level ESHS MS and the FMC’s ESHS MS and identify the areas where these are aligned or overlap.  

At a corporate level, one of the entities making up the sponsor (Alcazar Energy) is working towards a fully certified corporate ESMS / HSEMS, with a target to gain certification for ISO 14001, ISO 9001 and OHSAS 18001 in 1Q 2018.  The sponsor’s project ESHS policies, manuals and procedures will be developed and designed in alignment with these corporate systems and ISO requirements, and will reflect the oversight role the sponsor will need to take in managing and monitoring the EPC Contractor.

Part of the EPC JV (Environmena) has a robust corporate integrated management system (IMS) describing commitments for fulfilling its responsibilities towards a successful quality, health, safety and environmental (QHSE) management.  The system includes processes and procedures on auditing, management review, emergency preparedness, incident management, human resources and communication, participation and consultation.  The corporate ESHS MS system is certified and is compliant with ISO 14001, ISO 9001 and OHSAS 18001.  These corporate systems will form the basis of the EPC JV’s project specific ESHS MS.  As the EPC and O&M Contractor are the same company (EPC JV), there should be a seamless transition of the project from an EPC to the O&M Contractor which should minimize ESHS risks in the operational phase through the knowledge gained in the construction phase.

The EPC Contract is a key tool for ensuring compliance with the ESHS requirements of the sponsor. The contract was reviewed and will be updated to include specific requirements to comply with IFC PSs and the sponsor’s ESAP by the EPC Contractor and where applicable subcontractors and main suppliers, as well as a provision of resources for ESHS management and monitoring compliance of its subcontractors, per   ESAP action item #3  . 

Management Programs:   A framework Environmental, Social, Health and Safety Management Plan (ESHS MP) was prepared for the sponsor by EcoConServ as part of the EIA.  The ESHS MP contain separate outlines detailing the sponsors ESHS MPs for the construction, operational and decommissioning phases of the project.  The management plans include air quality, noise, soil, water resources, solid waste, and health and safety amongst other topics.  The ESHS MPs includes details on monitoring actions, and the frequency of monitoring, along with the performance indicators and the responsible entity EPC contractor / O&M provider (i.e. the EPC JV).  

The sponsor will also prepare, prior to financial close, a construction E&S management plan (CESMP), which will provide general guidelines for the development of project specific management plans by the EPC Contractor in line with the sponsor’s ESHS MS and Lender requirements.  In addition, a chance finds procedure will be developed.  The sponsor through its EPC     will make its ESHS MPs project-specific and align relevant ESHS aspects with, or adopt, the ESHS MPs developed by the FMC for the management of the cumulative E&S impacts for the Benban PV solar park, as detailed per   ESAP action item #1.    

The project will ensure that workers understand the requirements, measures, and protocols stipulated within the ESHS MP through induction training and a workers’ manual that is translated into Arabic.  It will also ensure that all E&S personnel are competent to carry out their duties through the hiring and selection process, or, where necessary, arrange for suitable training to be undertaken to achieve this level of competency before construction starts.

Organizational Capacity and Competency:   The E&S organizational structure is not fully developed.  However, the sponsor will manage all the construction and operations through the sponsor’s planned Quality, Health, Safety and Environment (QHSE) Manager and an Environmental Specialist.  The QHSE Manager will be suitably qualified and appointed in advance of the start of works, and will follow both the construction and operations phase of the project per   ESAP action item #4  .  In addition, there will be at least one EHS officer on-site for the construction phase and one based off-site during operations.  The EHS officer will be supported by additional EHS staff as required to manage the risks identified.  The ESHS officer will be responsible for the implementation of the ESHS MP, including monitoring actions. 

EPC JV will provide the EHS organizational capacity on site during construction and operation phases, with staff roles and responsibilities defined in its ESHS management system.  The EPC JV EHS focal person will collaborate with sponsor’s EHS officer, and liaise closely with the FMC to coordinate all “common issues” needed between the project site and the overall solar park.  

Emergency Preparedness and Response:      The sponsor will ensure that a project-specific Emergency Preparedness and Response Plan (EPRP) is developed, and that this project level EPRP is aligned with the EPRP for the Benban PV solar park and describes the reporting requirements and roles and responsibilities in relation to the FMC’s EPRP.  The EPRP will follow internationally recognized standards and similar plans developed for previously constructed solar PV projects in Egypt by the entities of the EPC JV which will be adopted for both construction and operation phases of the project.  EPC JV will provide adequate training to all staff to ensure that all workers on-site are familiar with the EPRP during the induction program of the newly hired workers and regular trainings.  

Monitoring and Review:     The sponsor will be responsible for reviewing and formally auditing the EPC JV with regards to their ESHS performance and compliance against its ESHS MS, Egyptian Legislation and IFC guidelines. EHS monitoring requirements will be included in the ESHS MP for the construction and the operations phases of the project as mentioned in the sub-section above on ‘Management Programs’ in this document.
 

 
The project will employ up to 500 workers during peak construction and an estimated 15-20 workers during operations.  The sponsor will be preparing project-specific Labor Management Requirements that will be integrated into the overall requirements of the FMC’s common work-force management plan for the Benban PV Solar Park.  The recruitment of workers will comply with FMC’s recruitment procedures which will seek to place jobs locally, before recruiting from further afield in Egypt.  Workers employed by the project during construction will be transported from the local communities and Aswan, or accommodated in FMC managed worker accommodation, or the sponsor’s worker accommodation, at the Benban PV solar park.  All aspects related to workers’ accommodation will be managed by the FMC or conform to the FMC’s workers’ accommodation standards and PS2 requirements.   The sponsor will develop a comprehensive workers’ accommodation plan for the project following the IFC workers’ accommodation guidelines that complies and is coordinated strictly with the FMC and the FMC’s worker accommodation plan as identified in   ESAP Item #5. 

Human Resources Policies and Procedures:       The sponsor and EPC JV will develop a Human Resources (HR) policy and procedures that are project specific and in line with IFC’s PS2 and with Egyptian labor law. The sponsor will also ensure that EPC JV apply these to their sub-contractors.  Training workers on the Human Resources Policy and Procedures is to be included in EPC JV’s procedures as per   ESAP item #6  .  The sponsor will ensure that its own overarching HR policy and the HR policy and procedures developed by the EPC JV are aligned.  EPC JV’s HR policies will be applied to their workers and sub-contractors; as the sub-contractors will likely be responsible for hiring workers, it is important that they implement their HR policy and procedures in line with the Code of Conduct for the sponsor.  The HR policy and procedures will be aligned with those of the FMC and stipulate that the terms of employment, such as wages and benefits, hours of work, overtime arrangements and overtime compensation, annual and sick leave, maternity and paternity leave, vacation and holiday, health insurance and end of service benefits are established according to Egyptian national labor regulations, and will be included in employee contracts.  This policy will be handed out to all new hires together with an employment contract which outlines the terms and conditions of their employment.  Working conditions (including health, safety and security), employee termination, prohibition of forced or child labor, disciplinary actions, workers’ rights and obligations, employer’s rights and obligations will also be referenced. 

Human Resources KPIs will also be developed for reporting from sub-contractors to EPC JV which in turn will report to the sponsor.  The HR procedures will incorporate any relevant HR procedures which are developed by the FMC to cover the whole Benban PV solar park.  

Workers’ Organization   :   In line with PS2, the sponsor’s and EPC JV’s HR policies will not impede workers from freedom of association and collective bargaining.  Workers will be able to organize among themselves and will not be intimidated, punished or discriminated against for doing so.  The sponsor’s and EPC JV‘s HR policies and procedures will allow workers to join unions or otherwise allow collective bargaining and that the sponsor and EPC JV will communicate with workers’ organization’s and their representatives.

Non-discrimination and Equal Opportunity:   The sponsor is committed to avoid all forms of discrimination against its employees, based on the age, gender, sexual orientation, health, race, nationality, political opinions or religious beliefs of its counterparties.  The requirements of non-discrimination and equal opportunities will be extended to all contractors and subcontractors as part of contractual obligations.  The sponsor’s HR policy will exclude the use of any form of forced or compulsory labor, in accordance with national law and IFC PS2.   

As per   ESAP item #6   ,   training for workers will be covered in the HR procedures of the EPC JV.  Induction training on the HR policy and procedures and basic safety awareness training will be provided to all newly hired workers.  Other types of technical skills training will be identified for staff on an as-need basis.  Enviromena (part of EPC JV) regularly conducts toolbox training sessions for its workers on similar projects, and the EPC JV will roll-out the same practice to this project. 

Worker Grievance Mechanism   :   The sponsor will develop and make available a worker grievance mechanism based on the Alcazar Energy’s grievance mechanism and will inform the workers of the grievance mechanism per   ESAP item #7  , through EPC JV, and describe how to make use of it during the induction training.  The grievance mechanism will also be accessible to other contractors and subcontractors performing work in core business processes of the project.  The sponsor’s grievance mechanism will also need to clearly define the response timeframes to grievances and incorporate a grievance log as part of the grievance redress mechanism process.

Occupational Health and Safety:      Key occupational health and safety (OHS) risks for a PV project include slips and falls, potential hazards from on-site moving machinery, heavy load lifting, exposure to electric shocks and burns, and safety issues related to PV module assembly.  Taking into account the hot and arid project location, construction workers might be at risk of dehydration, heat exhaustion and heat stroke if not properly hydrated.  

As per   ESAP item #8  , the sponsors will ensure that the EPC JV develops, as part of its Management System, project-specific OHS procedures for the construction and operations phases.  These procedures will cover the following issues: hazard identification and assessment; the construction site safety (barricades, safety nets, control of the access, clear demarcation of areas and provision of safety information to visitors, etc.); specific procedures for hazardous works; worker’s safety and training plan; personnel qualification, limitations and equipment needs (e.g. personal protective equipment); site supervision and audit procedures; incident reporting system and intervention measures (first aid etc.).  The procedure will be designed to be specific to the PV solar sector (in terms of industry-specific hazards) and the project site. The OHS procedure will also link into the project-specific Emergency Preparedness and Response Procedures (EPRP) which will include fire risk assessment and control systems, fire alarm systems and drills, emergency preparedness and planning, as part of OHS Procedures for both the construction and operation phases.    

The sponsor will also ensure that the EPC JV assesses, tracks and record its OHS performance during construction and operations. The EPC JV’s EHS officer will record and track any OHS incidents through an incident tracker and will include OHS performance in its monthly reports to sponsor’s management during both the construction and operation phases.

Workers Engaged by Third Parties:      The sponsor will take reasonable efforts to ascertain that the third parties who engage these workers are reputable and legitimate enterprises and have an appropriate ESHS MS that will allow them to operate in a manner consistent with the requirements of IFC’s Performance Standards.  The sponsors will establish policies and procedures for managing and monitoring the performance of such third-party employees in relation to IFC’s PSs as well as incorporate these requirements in contractual agreements with such third party employees, as identified in   ESAP #9  . 

Supply chain management:       The sponsors will conduct a supply chain assessment of the nominated primary PV supplier to identify key E&S risks/impacts and ensure the supplier complies with the principles of IFC’s PSs to appropriately manage these risks.  Particular consideration in the assessment should be given to confirming the adequacy of the manufacturing facility’s management of hazardous material storage, waste storage/disposal, compliance with working conditions and occupational and community health and safety requirements to demonstrate that the project’s suppliers are complying with IFC’s Performance Standards and EHS Guidelines.  The sponsors and EPC will include a clause in main supplier contracts regarding applicable PS2 requirements on child or forced labor and OHS .
 

 
 Resource Efficiency & Water   :   Resource consumption on a PV project is expected to be minimal, with the main resource utilized during construction being the use of water for dust suppression, concrete production, and domestic usage.  During operations, the main water use will be cleaning the PV modules and domestic usage.  The water used during construction and operations will be supplied by one of the sources currently under evaluation by NREA and at this stage is most likely to be a groundwater resource.  Based on the final EIA, the estimated water consumption during the construction phase is expected to be approximately 30m 3  /day or 900m 3  /month which includes construction workers’ consumption and construction activities consumption (including fugitive dust control, concrete production and equipment cleaning).

The estimated water consumption during the operation phase is estimated at 726m 3   per year. This is predominantly required for the cleaning of the panels.    

The sponsor and the EPC JV have agreed on the approach for the PV cleaning, and the project will use automatic wet cleaning mechanism on a fortnightly basis (i.e. 26 times a year).  One special cleaning vehicle will be used and if necessary, depending on soiling conditions and production efficiency, additional manual cleaning will be utilized every two weeks during some weeks of the summer season depending on the actual soiling level.  Water use will be a key performance indicator (KPI) and reported as part of the sponsor’s ESHS performance, and will require the EPC JV to develop a project-specific water management plan and KPIs, and evaluate lower water use cleaning methods to minimize the amount of water used as per   ESAP item #10  .  Moreover, the project’s water management plan to be developed by EPC JV needs to align with the FMC’s water management plan.  The water management plan for the project will also include information on water quality testing and water quantity estimates. 

Solid Waste Management   :   Waste generated during construction mainly consists of municipal and construction wastes that will be collected by a FMC approved contractor to be disposed of in designated landfill sites.  The overall volumes of both solid and hazardous waste generated by the project during construction are expected to be low.  It is anticipated that solid waste will comprise paper, wood, plastic, scrap metals, and glass, and hazardous waste will be likely to comprise fuel, oils, lubricants, hydraulic/insulating fluids and batteries, tires, metal drums, and empty chemical containers.  A limited number of waste PV modules are expected to require disposal during the construction phase and they will be returned to the PV manufacturer (Jinko Solar). These waste streams will be segregated as per the procedures of EPC JV which are to be included in the ESHS MP and volumes recorded.  Hazardous materials will be stored in a dedicated area and handled with care; a register will be maintained and Material Safety Data Sheets displayed in Arabic and English.  The EPC JV waste management procedures will be aligned with those of the FMC and waste transportation and disposal will be through licensed third party waste contractors approved or contracted by the FMC, with the disposal being to an approved and properly designed municipal or hazardous waste landfills.

During operation, waste generated will be largely limited to domestic waste, and waste generated from maintenance.  At the end of the PPA, when the plant is decommissioned, the priority option of disposal of the PV panels will be through recycling.  In addition, Jinko Solar, the PV module supplier, has included the use of PV Cycle as part of its contract to collect and recycle the modules at the end of the project life.  Waste disposal during operation will be managed through licensed third party waste contractors approved or contracted by the FMC.

Energy Efficiency & GHG Emissions:   Greenhouse gas emissions from the project during the construction are expected to be predominantly associated with the use of fuels such as in generators, transport, on-site equipment, and machinery. Although the quantities of emissions have not been calculated, these are expected to be low and significantly less than 25,000 tonnes CO 2e  .  

The project is expected to generate approximately 126.281 gigawatt hours (GWh) of electricity per year.  Egypt’s current carbon dioxide emission performance (from fuel combustion) is 0.465 kg carbon dioxide per kilowatt hour (CO 2  /kWh) (according to International Energy Statistics, 2013).  Given the statistics above, during operation, the sponsor estimates that the production of approximately 57,643 tonnes of CO 2eq  /year will be avoided by the project’s operation. 

Pollution Prevention:      A diesel generator will be required during construction which will locally impact air quality and require fuel management and containment. EPC JV has a generator management plan that defines fuel use, regular maintenance and provision of adequate measures for air quality (such as the use of air filters), noise control and waste management.  As per   ESAP action #11,   sponsor and EPC JV will develop environmental management plans and/or procedures (as part of the Operational Element of the ESHS MS) relevant to the Benban site to manage pollution related aspects of the project in line with the WBG’s EHS Guidelines. Aspects should cover, among others dust, management of waste, hazardous materials, spills, occupational noise, etc.  

Wastewater Treatment: During the construction phase, wastewater will be generated and will be disposed off-site, either in the form of sewage or uncontaminated wastewater.  The FMC will have the overall responsibility for the management, collection and disposal contracts for sewage and other wastewater from the overall Benban PV solar park.  It will also be responsible for the procurement of common provision of waste disposal facilities with the aim to be more efficient and convenient, and ensure that wastes disposal meets lender requirements.  EPC JV will prepare a project-specific waste management plan which appropriately ties in with FMC plans and ensure that they handle, store and manage the project site wastewater effectively.  These plans will need to be aligned with the requirements of relevant sections of the applicable WBG EHS Guidelines.

Community Health and Safety:      As part of the ESHS MP, the sponsor will develop a Community Health and Safety Plan as well as a plan for Training and Awareness which will be aligned to the FMC’s plans.  The FMC plans will need to address the influx of construction workers coming into the Benban area for the project development, and their impact on the community at large including the risk of infectious diseases, proper buffer zones and all requirements listed in PS4.  The EPC contractor will also develop and implement a Worker Code of Conduct which will also apply to all subcontractors to ensure they maintain high standards within the community, and meet the requirements of PS4.

Traffic Management:      As noted in the SESA, during peak construction there will be an estimated 1,400 vehicles/day accessing the various projects within the solar park, which could present a potentially significant risk to the workers and personnel on site, and the local community along the main and access roads unless it is well managed.  The project-specific traffic movements, based on the  EIA, are likely to include up to 600 containers movements during the construction phase.  Project traffic management will need to be coordinated with the BDA and FMC and aligned with the FMC’s  traffic management plan  ensure that risks to workers and community members are mitigated.  As such the sponsor will develop a project-specific traffic management plan in alignment with the FMC’s overarching traffic management plan as identified in   ESAP #12  .

The internal roads on the solar park will consist of compacted site material and gravel capable of supporting the traffic loads during construction and operation.  A  new road will be required to connect the  Benban PV solar park  with the existing asphalt road and which will be built by NREA. 

Security:      The FMC will be responsible for the security of the Benban PV solar park. However, the sponsor will also conduct a security risk assessment for its site within the park and define an appropriate security management plan for its site. The sponsor will develop and implement a Security Risk Assessment and a Security Management Plan which captures the key elements of PS4.  This will be adopted by EPC JV and will aligned with the FMC’s security management plan for the whole Benban PV solar park as per   ESAP item # 13  . 

Under the project-specific SMP, perimeter fences, CCTV cameras, intrusion detection and a single and controlled entry will be used.  In addition,  EPC JV  will establish a security contract with a private security company in Egypt and which preferably hires unarmed security personnel from within the neighbouring cities such as Aswan.  Security contracts will be managed by the assigned project manager, who will determine the detailed security plan during phases of execution and the reporting structure for security events or breaches.  To ensure alignment with IFC performance standard requirements for security arrangements,  EPC JV will make reasonable inquiries to ensure that the private security provider’s team are not implicated in past abuses; will train them adequately in the use of force, and appropriate conduct toward workers and nearby communities; and require them to act within the applicable law.   EPC JV will not sanction any use of force except when used for preventive and defensive purposes in proportion to the nature and extent of the threat.  
 

 Contact:    Vito Saluto