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 privatization of Karacaören I will involve Gama’s taking over of 117 hectares (ha), including 52 ha for the administration compound and surrounding area, while for Karacaören II it will involve the taking over of 106 ha from the Government of Turkey. The land and infrastructure are State-owned, and no private land will be acquired or affected by the project. As such, PS5, Land Acquisition and Involuntary Resettlement, does not apply. The project will not cause changes in terrestrial or aquatic biodiversity, so PS 6, Biodiversity Conservation and Sustainable Management of Living Natural Resources, will not apply. However, as noted under PS 1, further consideration is to be given to possible future environmental/minimum flow releases. There are no Indigenous Peoples in the area; therefore, PS 7, Indigenous Peoples, does not apply. In addition, the project does not involve any new excavation, disturbance of land that could affect tangible cultural heritage, and there is no known intangible cultural heritage that could be affected; as a result, PS 8, Cultural Heritage does not apply.

This is a Category B project according to IFC’s Policy on Environmental and Social Sustainability because the environmental and social impacts that could result are limited and site-specific, and can be avoided or mitigated by adhering to generally recognized performance standards and good international industry practices.

No new environmental and social impacts are expected to occur as a result of the acquisition and continued operation of these generation assets by the company, but rather a continuation or even a reduction in existing impacts.

Based on the review of available project information, key project-related EHS and social issues were identified as being related to stakeholder engagement, occupational health and safety, potential changes in the amenities provided to local communities in the Karacaören I administration compound, and the potential requirement for some minimum environmental flows to be discharged from the powerhouses and/or through the Karacaören II spillway.

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 and Management Systems: Gama has a corporate environmental and occupational health and safety policy that emphasizes the importance of sustainable development and protection of the environment and quality of life while developing projects. The policy commits the sponsor and its subsidiaries to protecting the health and safety of workers and preventing pollution by applying appropriate technologies and measures. Gama will extend to Kremna an environmental and social policy consistent with the corporate-level policy.



Similarly Gama’s management systems are certified for quality (ISO 9001), environmental management (ISO 14001), and occupational health and safety (OHSAS 18001). This system will be implemented at the project level.



Management Program: As required by the equity investment ESAP, Gama developed a series of management plans and procedures, including waste management, stakeholder engagement, contractor management, security risk management, land acquisition, and cultural heritage assessment. All have been submitted to and approved by IFC. As outlined in ESAP item 1, Gama and the project company will develop a series of project-specific environmental and social procedures for Karacaören covering emergency preparedness and response (involving daily checks for seepage through Karacaören I dam), waste management, hazardous materials management (including removal of the aboveground tank), occupational health and safety (including rockfall at Karacaören II), site security management and human resources.



Identification of Risks and Impacts: At the time that PPA embarked on the privatization program, it commissioned Environmental Due Diligence Reports (EDDRs) for assets to be privatized, including Karacaören I and II. These EDDRs concluded that there would be no significant major environmental or social impacts from privatization and continued operation.



As required by the corporate ESAP, Gama commissioned an Environmental and Social Due Diligence of the Karacaören assets, which is yet available only in draft form. The ESAP (item 2) requires implementation of priority recommendations of the final ESDD report, after discussion with IFC. In addition, Gama’s Health, Safety, and Environment (HSE) manager reported that a safety audit has been completed in order to identify areas where upgrades may be needed to meet international standards. Recommendations arising from this audit are to be in the OHS plan (ESAP item 1).



The Karacaören I administration buildings are part of a complex that includes several residential buildings formerly used to house Karacaören I staff and still housing a few, a small shop, and a primary school that serves about 120 children from families of the few remaining staff that reside on site and from several surrounding villages. In addition, a mosque is part of the compound. Gama is initiating a zoning/reclamation study that will result in the land parcels where the school and mosque are located being
transferred to the relevant government agencies.



Environmental flow assessment: As discussed previously, PS 6 is not applicable to the project since there will be no incremental impact on terrestrial or aquatic habitats or biodiversity. However, one issue of importance is what is known as the “environmental flow”, or the minimum amount of water that must be released from the powerhouses to the downstream riverbeds. At present, DSI discharges water from the two powerhouses only when electricity is being generated, which can be only a few days per week. When there is no discharge from the powerhouses, water below the respective tailraces is not flowing but rather consists of the shallow backwaters of downstream reservoirs (Karacaören II reservoir downstream of Karacaören I, the Eskikoy HPP reservoir downstream of Karacaören II). In addition, water is diverted by the Karacaören II dam into a tunnel. As a result, the riverbed is dry for one or more kilometers downstream of the dam until a small tributary flows into the channel.



Turkish law requires a minimum of 10 percent of the annual average of the last 10 years’ flow to be discharged as an environmental flow. Although there is no explicit exemption for facilities in operation at the time the law was passed, DSI was never required to maintain a minimum flow downstream of the Karacaören II dam or downstream of the Karacaören I and II powerhouses. The sponsor’s HSE manager reports that 10 percent of the average annual flow would amount to about 2 cubic meters per second (m3/sec) for each of the Karacaören facilities. The EDDRs state that 10 percent of the average of the last 10 years’ flow at Karacaören I would be 1.82 (m3/sec), and at Karacaören II would be 1.9 m3/sec. The environmental due diligence commissioned by Gama concluded that the lack of discharges when no power was being generated was not a significant issue. At present, however, it is not known if the permits to be issued to the company will require a minimum flow, and if so if it would be required downstream of the Karacaören II dam and downstream of each powerhouse, or at only one or two of these locations.



The company will confirm with the authorities whether any environmental flow will be required. If some minimum flow is needed, and/or if the company decides to install turbines to generate electricity from small environmental flow discharges, the company will undertake studies and actions as needed to comply with environmental flow requirements (ESAP item 3).



Organizational Structure and Capacity: Gama has a full-time HSE manager and a compliance manager, as required by the corporate ESAP. These individuals oversee environmental, social, health and safety planning and performance at Gama and all its assets. The company will assign an OHS expert for the operation team who will report to the corporate OHS manager.

Human Resources: As required by the corporate ESAP, the sponsor has an HR policy in place that meets the requirements of Turkey law and IFC PS 2. Policies and procedures cover, among other areas, child and forced labor prevention, retrenchment, working conditions and terms of employment, nondiscrimination and equal opportunity, worker organizations, and a grievance mechanism for workers. The sponsor will ensure that the project company will adopt equivalent HR policies and procedures, as required by ESAP item 1.



EÜAŞ currently employs 33 permanent employees and 35 casual workers at Karacaören I, and 23 employees and 8 workers at Karacaören II. The environmental due diligence commissioned by Gama states that EÜAŞ will find other employment only for the permanent employees, leaving the casual workers at risk of losing their employment. Gama has interviewed both permanent employees and other workers at both facilities and will determine how many to retain in the next 2-3 months, following the transfer agreement between Gama and EÜAŞ. Following the results of these interviews, Gama will optimize the operating staff and organization structure. Once the new hires are made, the company will need to communicate its own policies and procedures to the employees, who may have worked for years under EÜAŞ’s system. This transition period is necessarily a time of uncertainty and tension for all the workers, and the company will need to have its policies and procedures in place before it assumes responsibility for operation.



Occupational Health and Safety (OHS): During IFC’s visit to the site, it was observed that the buildings were in reasonable condition and there were many signs reminding workers of hazards and safe work practices. Karacaören I powerhouse appeared to be in better condition than Karacaören II, and signage was more prominent, At both facilities, handrails and fire extinguishers were generally in place as needed, but some ladders and other facility infrastructure will require improvement to meet international standards. Personal protective equipment use appeared deficient, with few or no workers wearing safety boots or hard hats, which were seen to be available although unused. Gama has completed an OHS audit of the two hydropower plants to characterize current conditions and has identified needed upgrades, which will be started immediately upon assuming responsibility for operation.



The ESAP (item 1) requires the company to develop and adopt a comprehensive OHS plan that will apply to all site workers. The OHS plan will identify task-specific risks, define safety protocols to follow for each task, and describe limitations and equipment needs, including personal protective equipment. It will also describe training requirements needed for each task, with special attention for workers exposed to particularly hazardous environments, including those working at heights, in excavations or confined spaces, with chemicals or electricity, an
d with heavy equipment and machinery. The company will maintain training records and track performance, including work hours, safety incidents that lead to time away from the job (“lost-time” incidents), and serious accidents and fatalities. For serious injuries and fatalities, the plan will require a root cause evaluation.



A steep slope beside the Karacaören II powerhouse showed evidence of instability, with a partially failed shotcrete cover and concrete fence having failed to stop several boulders and rocks from reaching the parking area. The OHS plan will need to include provision for taking further steps to stabilize this slope.

Water quality: Both powerhouses have operating septic systems, and sanitary waste from the Karacaören I administration compound is treated in a package plant. The ESDD commissioned by Gama reported this plant is properly permitted and monitored, and that water quality meets applicable standards. The ESDD also reported the condition of the septic systems is not known, and recommended that the company conduct an assessment to verify they are working properly and not allowing sewage to escape uncontrolled. As per ESAP item 4a the company will conduct an assessment of the integrity of the septic system that serves each powerhouse and the collection system at the Karacaören I administrative compound, and will make such repairs or replacements as are needed to ensure sanitary effluent does not affect water quality.



Water quality in both reservoirs is reported to be poor due to fish farms, although no data were available for review. It is unlikely the project would have any effect on future water quality. However, prior to assuming responsibility for the project, the company will establish baseline water quality so it can be determined whether the company is responsible in the event that future issues arise regarding water quality, as per ESAP item 4b.



Hazardous materials management: Neither facility has a refueling station, and the only fuel storage is a disused aboveground tank at the Karacaören I administration complex that is reported to be half full of oil, that will be removed. Both powerhouses contain rooms with a number of drums of turbine and other oils. Several drums of waste oil were stored alongside the fresh oil. Storage areas are neat and tidy, but none have secondary containment. The ESDD noted the buildings could contain asbestos and requires this be determined and any asbestos be assessed and removed. The ESAP (item 2) requires implementation of ESDD recommendations, including this one.



Gama has a corporate Waste Management Plan that will be used as a model for the plan to be developed for Karacaören. Given the limited variety and quantities of materials and wastes that are handled at the facilities, hazardous materials management and waste management can be covered in the same plan, or in separate plans at the company’s discretion.

Community Health and Safety: Both powerhouses are distant from local communities so there is limited potential for them to be affected. However, there is relatively easy access to some project infrastructure that will remain under DSI’s control, including the intakes for the Karacaören I flood spillways as well as both dams, each of which is crossed by a public road. If there are incidents or accidents involving these facilities, it is possible that affected people could mistakenly consider the company to be responsible. For that reason, the SEP will need to include provisions for abundant signage on the fences of company boundaries that clearly delineates the ownership (only for company owned areas), and also signs on entrance points that prohibit unauthorized entry to company property.



Emergency Response: With the exception of the Karacaören I administration complex, all project facilities are well away from public areas and villages, with no residences within at least a few kilometers.



Gama has a corporate emergency preparedness and response plan which will be adapted to the Karacaören project (ESAP item 1).



Karacaören I powerhouse is at the base of its dam, and failure of the dam could have catastrophic consequences to infrastructure and workers. Other than the powerhouse, there are no residences or other infrastructure downstream of the dam that could be affected in case of failure. The company will not be responsible for the dam, so can take no steps actually to prevent failure. Since this earthfill dam would likely fail over a period of hours or days, and there would probably be some sign of imminent failure due to seepage or piping through the dam face, the project emergency preparedness and response plan will need to include requirements for at least daily observations of the dam face to detect the presence of water, which in turn could signal the need for closer inspection and possible further action. Evidence of water should be relatively easy to detect since the dam face is light-colored rock and earth that is largely unvegetated. Even though the sponsor will have no direct responsibility for the dam, the company will complete a dam safety analysis consistent with international standards (International Commission on Large Dams ICOLD). If the results of the safety analysis suggests that dam safety is compromised, the company will propose a remedial actions program in order to improve safety, or design and implement a warning system sufficient to protect company property and workers (ESAP item 5).



There are believed to be no people or infrastructure downstream of Karacaören I powerhouse that would be affected by the one to two meter rise in water levels that occurs when power generation goes from zero to its maximum level, but this will need to be verified. The riverbed has been armored with rock for some distance, so water would be confined to the main channel.



Karacaören II powerhouse is 10 kilometers downriver from
its dam, and also lies five or more meters above the riverbed, so sudden failure of this concrete dam would not affect the powerhouse and its workers. Again, the company will have little or no influence over the dam itself, even though it will operate the spillway gates, at DSI’s orders, in case of flood or other need to release water through the dam. Only if there were operator error or other mistake by the company should any liability accrue in case of flood damage downstream, since otherwise DSI would bear responsibility. Thus, this becomes more of an issue of legal liability than operational responsibility that would be addressed in an operating plan.



Similar to Karacaören I, no people live in the floodplain that could be affected by the one-meter rise in water levels that occurs when Karacaören II power generation begins and goes to its maximum level. Below the tailrace for some distance downstream, the riverbanks are armored with rock, so the river would remain within its channel. Further downstream, there are some side-channels that feed irrigation channels, so it is at least possible that persons in these areas could be affected. For that reason, the company will be required to evaluate river reaches downstream of both Karacaören I and Karacaören II to identify whether any persons use the riparian zones who could be affected by rises in water levels due to generation releases of floodwater through spillways (limited to one possible and one extreme scenario), or dam failure. Based on the results, the company will propose to IFC approaches to avoid adverse impacts, as per the Company’s liabilities under the water usage agreement which is to be signed with DSI (ESAP item 6).

Security: EUAS has armed security in Karacaören I and II sites. The Gama HSE manager reported that a regional/local committee led by provincial governor determines whether security forces need to be armed. The sponsor has developed a corporate Security System Management Manual, and this will be adapted for the Karacaören project. The Manual requires that all contracts with security companies reflect the requirements of “Voluntary Principles on Security and Human Rights” and the “International Code of Conduct for Private Security Service Providers.” There is relatively easy access to both powerhouses from public roads, and there is no signage or other cautions against trespassing. More controlled access will need to be part of the project’s security program, which will be reflected in a Project Security Plan (ESAP #1).

The primary stakeholders who would be affected by the company’s acquisition and operation of Karacaören I and II power generation assets would be the current EÜAŞ workers, including those who will be transferred to other EÜAŞ locations, hired by the company, or laid off. The sponsor’s HSE Manager reports that all workers are, and for some time have been, well aware of the upcoming change in ownership and employment practices, although the nature of EÜAŞ communications with the workers is not known. As noted previously, the company has met with many or most workers in the process of conducting interviews of prospective employees.

Another important stakeholder group is the tenants of residential buildings at Karacaören I compound and those who receive benefits from EÜAŞ activities. A few families still occupy apartments in the buildings, and the mukhtar’s (village headman) family occupies a single-family dwelling. In addition, a small shop is operated by a cooperative founded by EÜAŞ employees. The families and shop now live rent-free, with electricity, water, and water treatment provided by EÜAŞ at no cost. The sponsor has not yet agreed with EÜAŞ, or otherwise taken any decisions, regarding the residential buildings or their occupants. Another potential impact may be on two public facilities; namely a primary school and a mosque which benefit from EÜAŞ’s in-kind support, including water and electricity.

Other individuals and groups may believe the projects and Gama’s actions are affecting them even when they are not. The two reservoirs that will continue to be managed by DSI irrigate around 55 ha of agricultural land and host about 10 large-scale fish farms. In addition, Antalya municipality is currently constructing a pipeline, which is planned to originate from the entrance of Karacaören II’s penstock, to provide the city with drinking water. This will require DSI to reduce the number of fish farms in order to improve existing water quality. These plans are outside the sponsor or company area of responsibility, so no compensation is required. However, as noted, it is likely that stakeholders may not distinguish between future actions taken by Gama and the project company and those taken by DSI and other parties. Since impacts of such actions could have important implications on stakeholders (e.g., reducing or eliminating fish farms or changing irrigation releases), it will be important for Gama and the project company to disseminate information on what their new responsibilities are, and what will remain under DSI, EÜAŞ, or other parties’ control. In addition, some areas – such as the public roads that cross both dams and the Karacaören I spillway intakes -- that will remain in DSI control and ownership are accessible to the public and could present hazards to trespassers; it will be important for Gama to make clear that these areas are not under its control.

The sponsor has an approved corporate level Stakeholder Engagement Plan (SEP) under which, as outlined in ESAP item 7, a SEP for the Karacaören project will be developed. This project SEP will guide interactions with local communities and authorities. Stakeholders will include those who could be affected by the project and those who believe the company’s actions will affect them. The SEP which will include consultation program with the affected people should focus on affected people’s expectations and/or concerns; and disseminating information on the respective responsibilities of the company and of other parties. The SEP will also include a grievance mechanism by which external stakeholders may express concerns or submit complaints.

Contact Person:Doruk Bilge Tuncer
Company Name: GAMA Enerji A.Ş.
Address: Nergis sok. No: 9 GAMA Binası 06520 Söğütözü/Ankara
Email: mailto:dtuncer@gamaenergy.com
Phone: 05333606950
Facsimile: +903122484601

Broad Community Support is not applicable for this project

Karaca Hydro(37872) Supervision Disclosure Snapshot – Version 2
Description	Anticipated Completion Date	Status	Comments	Completion Date
1. The company will prepare for IFC review environmental and social management procedures covering emergency preparedness and response (including daily checks for seepage through Karacaören I dam), waste management, hazardous materials management (including removal of the aboveground tank and asbestos checks/removal), occupational health and safety (including rockfall at Karacaören II), project security, and human resources. These procedures will be consistent with Gama’s corporate-level plans.	15-Jun-2016	Completed	Completed	1/1/2019
1. The company will prepare for IFC review environmental and social management procedures covering emergency preparedness and response (including daily checks for seepage through Karacaören I dam), waste management, hazardous materials management (including removal of the aboveground tank and asbestos checks/removal), occupational health and safety (including rockfall at Karacaören II), project security, and human resources. These procedures will be consistent with Gama’s corporate-level plans.	15-Jun-2016	Completed	Completed	1/1/2019
2. The company will implement priority recommendations of the final Environmental and Social Due Diligence report prepared by Encon Consultants, following discussion with IFC.	30-Jun-2017	Completed	Completed	1/1/2020
2. The company will implement priority recommendations of the final Environmental and Social Due Diligence report prepared by Encon Consultants, following discussion with IFC.	30-Jun-2017	Completed	Completed	1/1/2019
3. The company will confirm with the authorities whether any environmental flow will be required. If some minimum flow is needed, and/or if the company decides to install turbines to generate electricity from small environmental flow discharges, the company will undertake studies and actions as needed to comply with environmental flow requirements.	31-Dec-2016	Completed	Completed	1/1/2019
3. The company will confirm with the authorities whether any environmental flow will be required. If some minimum flow is needed, and/or if the company decides to install turbines to generate electricity from small environmental flow discharges, the company will undertake studies and actions as needed to comply with environmental flow requirements.	31-Dec-2016	Completed	Completed	1/1/2019
4a. The company will also conduct an assessment of the integrity of the septic system that serves each powerhouse and the collection system at the Karacaören I administrative compound, and will make such repairs or replacements as are needed to ensure sanitary sewage does not affect water quality.	31-Dec-2016	Completed	Completed	1/1/2019
4a. The company will also conduct an assessment of the integrity of the septic system that serves each powerhouse and the collection system at the Karacaören I administrative compound, and will make such repairs or replacements as are needed to ensure sanitary sewage does not affect water quality.	31-Dec-2016	Completed	Completed	1/1/2019
4b. The company will establish baseline water quality immediately prior to the company’s assumption of responsibility for the project to allow determination of the company’s responsibility for any future issues.	15-Jun-2016	Completed	Completed	1/1/2019
4b. The company will establish baseline water quality immediately prior to the company’s assumption of responsibility for the project to allow determination of the company’s responsibility for any future issues.	15-Jun-2016	Completed	Completed	1/1/2019
5. The company will complete a dam safety analysis consistent with international standards (International Commission on Large Dams ICOLD). If the results of the safety analysis suggests that dam safety is compromised, the company will propose a remedial actions program in order to improve safety, or design and implement a warning system sufficient to protect company property and workers.	31-Dec-2016	Completed	Completed	1/1/2020
5. The company will complete a dam safety analysis consistent with international standards (International Commission on Large Dams ICOLD). If the results of the safety analysis suggests that dam safety is compromised, the company will propose a remedial actions program in order to improve safety, or design and implement a warning system sufficient to protect company property and workers.	31-Dec-2016	Completed	Completed	1/1/2020
6. The company will evaluate river reaches downstream of both Karacaören I and Karacaören II to identify whether any persons use the riparian zones who could be affected by rises in water levels due to generation startups, releases of floodwater through spillways (limited to one possible and one extreme scenario), or dam failure. Based on the results, the company will propose to IFC approaches to avoid adverse impacts, as per the Company’s liabilities under the water usage agreement which is to be signed with DSI.	31-Dec-2016	Completed	Completed	1/1/2019
6. The company will evaluate river reaches downstream of both Karacaören I and Karacaören II to identify whether any persons use the riparian zones who could be affected by rises in water levels due to generation startups, releases of floodwater through spillways (limited to one possible and one extreme scenario), or dam failure. Based on the results, the company will propose to IFC approaches to avoid adverse impacts, as per the Company’s liabilities under the water usage agreement which is to be signed with DSI.	31-Dec-2016	Completed	Completed	1/1/2019
7. The company will prepare a Stakeholder Engagement Plan to guide ongoing interactions with local communities and authorities. Stakeholders will include those who could be affected by the project and those who believe the company’s actions will affect them. The SEP which will include a consultation program with the affected people that should focus on affected people’s expectations and/or concerns; and disseminating information on the respective responsibilities of the company and of other parties. The SEP will also include a grievance mechanism by which external stakeholders may express concerns or submit complaints.	31-Dec-2016	Completed	Completed	1/1/2019
7. The company will prepare a Stakeholder Engagement Plan to guide ongoing interactions with local communities and authorities. Stakeholders will include those who could be affected by the project and those who believe the company’s actions will affect them. The SEP which will include a consultation program with the affected people that should focus on affected people’s expectations and/or concerns; and disseminating information on the respective responsibilities of the company and of other parties. The SEP will also include a grievance mechanism by which external stakeholders may express concerns or submit complaints.	31-Dec-2016	Completed	Completed	1/1/2019