The project is categorized as A because: (i) 8 of a total of 32 turbines are sited within the limits of a key biodiversity area, an important bird area registered as - BA 18 Caldenal del Sudoeste de Buenos Aires, which is classified as Critical Habitat (CH) under IFC PS 6 and requires demonstration of ‘net positive gain’; (ii) while it is the view of the international and regional bird specialists involved to date that the project is predicted to have limited impacts on the two priority bird species in the area, the lack of a full (12 month or 2 season) pre-construction bird baseline to confirm this, requires the IFC to take a precautionary and comprehensive approach to mitigation and management of potential impacts and risks.

Key environmental and social (E&S) issues for the project during construction involve ensuring project contractors consistently apply good environmental and social practices in accordance to IFC PS requirements, ensuring appropriate occupational health and safety measures are taken during activities that require working at heights, and ensuring the safety and security of public road users while transporting turbines, heavy machinery and equipment on public roads. Key issues to implement during operations are post construction monitoring of project impacts on birds and bats and the application of adaptive management techniques to ensure their mitigation. None of the mitigation measures will affect wind power production at the park.

The project implemented two important preventive measures during technical design, based on Lender input. The company: (i) carried out micro-siting of three turbines to avoid direct impacts on a small tract of caldenal shrub woodland, potential habitat to the IUCN EN yellow cardinal bird species; and (ii) re-routed the T-line to a fourth alternative (not previously considered) located under an existing 500 kV HVTL, thereby avoiding disturbance to a section of grassland used by the loica pampeana, a priority bird species which might otherwise have faced electrocution risk and habitat displacement due to construction of the T-line in that location.

Environmental and Social Assessment and Management System

The ESIA for La Castellana was prepared in May 2016 for the wind park as well as the transmission line (T-Line) and received approvals from both the federal and provincial level environmental authorities in August 2016. The ESIA provides a characterization of the natural and human conditions and receptors in the project area and a preliminary impact assessment.

The assessment of the high voltage 132 kV T-line route involved an alternatives analysis with 3 options. At the request of the lenders, a fourth option was studied to avoid potential sensitive impacts on the loica pampeana, as described earlier. An addendum assessing the 4^th option has been prepared to the approved ESIA and submitted to the environmental authorities for approval. Approval is expected in April 2017, prior to commencement of construction works of the T-line.

The approved ESIA includes an Environmental and Social Management Plan (ESMP), which identifies a series of management programs to avoid, prevent, mitigate and manage construction and operation related E&S risks and impacts of the project. The policies, plans and procedures in the ESMS follow the corporate principles and objectives of Central Puerto, the project sponsor.

The E&S management plan includes measures designed to manage and mitigate the following potential impacts and risks of the project, among others: (i) erosion and sedimentation control and impacts to groundwater and drainage patterns during construction; (ii) reforestation activities to offset impacts from the clearance of vegetation cover, particularly caldenal that are protected by law; (iii) traffic safety during construction, including transportation of heavy machinery, materials and equipment to the project site; (iv) rescue, rehabilitation and/or release of fauna potentially impacted during construction and/or operations; (v) human resources management including policies on recruitment, worker codes of conduct and training on occupational health and safety measures; (vi) chance find procedures to avoid impacts on potential cultural heritage findings during earthworks; (vii) management and disposal of solid and hazardous wastes; and (viii) monitoring of construction and operational noise, and vibration effects, as well as impacts associated with shadow flicker and blade throw..

The proposed Management Programs, discussed above are being developed by the project contractors. The program will consolidate good practices from each contractor into a management system, that will include measures to be implemented during each phase of the project development cycle.

Policy

Central Puerto’s approach to the environment, the safety and wellbeing of its workers, communities, shareholders, clients and contractors is stipulated in several corporate documents: a Code of Business Conduct, a Mission and Vision Statement, a Code of Corporate Governance, an integrated environmental, social, health, safety and quality (ESHSQ) policy, and Human Resources (HR) policies. The EHSQ policy provides an overarching statement on the principles that guide all activities managed by the company. The principles and objectives of these documents are consistent with the requirements of IFC PS1.

La Castellana will have a policy aligned to the sponsor’s own integrated EHSQ policy, but will include social elements, including key principles and considerations around labor and working conditions, community health and safety, and stakeholder engagement and grievance resolution (ESAP Condition 1).

Identification of Risks and Impacts

Project risks and impacts are identified and prioritized following a risk mitigation hierarchy at Central Puerto, as documented in their risk and impact identification procedure.  Project risks and impacts were partially identified in the ESIA. The project will ensure that risks and impacts identified during lender due diligence, and discussed in this report, are appropriately communicated to and required of contractors.

The project will prepare an updated E&S Management Plan (ESMP) for the project covering all priority risks and impacts and indicating the party responsible for the management of each of the mitigation measures proposed. (ESAP Condition 2).

Management Programs

Central Puerto has an ISO 14001 (environmental management), 9001 (quality), and OHSAS 18001 (occupational health and safety) compliant integrated management system, applied to its thermal and hydropower activities across Argentina. This management system and a system of independent audits will be extended to La Castellana.

The following programs will be implemented at the request of the IFC: (i) bird and bat monitoring and intensive post construction monitoring for a period of 3 years (unless findings from the first year of monitoring demonstrate no significant impacts), including carcass searches, adaptive management procedures and conservation efforts to demonstrate net positive gain from impacts caused on any caldenal species; (ii) ongoing stakeholder engagement; and (iii) timely and systematic grievance redress.

There are currently no other wind projects in close vicinity to La Castellana. The client will carry out a cumulative risk assessment in the event new developments are sited within a reasonable distance the project, posing a potential biodiversity risk for either.

Organizational Capacity and Competency

Central Puerto will have a construction management strategy whereby a central team will closely follow the construction schedule, manage contracts and monitor good industry practices and compliance with local regulations for environmental, health and safety issues.

The sponsor has assigned an environmental manager and OHS manager to work alongside Ventus (owner’s engineer), to oversee construction activities undertaken by each contractor. Contractors are required to have their own EHS teams, responsible for implementing the management and mitigation measures approved for the project.

To ensure all contractors manage EHS considerations consistently, the project will establish a committee with members from each of the EHS teams, led by Ventus. The team will meet on a weekly basis to coordinate management of any work activities they may have in common, and share experiences applying GIIP aligned to the project management programs, host country legal requirements and IFC PS requirements. The project will prepare an ESHSQ organization chart and the objectives and functions of the ESHSQ Committee (ESAP Condition 3).

Emergency Preparedness and Response

The client will require the construction contractor to prepare an emergency preparedness and response plan for the project construction phase. The plan will include considerations that affect the health and safety of workers, communities and visitors, including risks associated with interaction with animals and/or other vectors of illness, disease and outbreaks in the area. It will define the protocols to be actioned by the plant managers in the event of an emergency and any necessary arrangements with emergency services.  (ESAP Condition 4).

Monitoring and Review

A monitoring and supervision plan will be developed for the project based on the ESMP described above, and consistent with practices covered in Central Puerto’s integrated management system. This plan will measure the effectiveness of the management program as well as compliance with legal and contractual obligations, including IFC and IIC requirements. The monitoring program will involve the active involvement and participation of project contractors (ESAP Condition 5).

La Castellana will employ up to 150 workers at peak construction, and create around 15 permanent jobs at operations.

Human Resources Policies and Procedures

The client will establish a Human Resources (HR) policy based on the principles of Central Puerto’s HR policies and procedures and IFC PS 2, and will require contractors to align with this policy. The client will also ensure that documented information provided to workers is clear and understandable, including details around collective agreements, hours of work, wages, overtime, compensation, training, and benefits (ESAP Condition 6).

Working Conditions and Terms of Employment

The project will not have on-site dormitories for workers. Workers will be housed in accommodation in the city of Bahia Blanca.

Non-Discrimination and Equal Opportunity

The project will ensure that recruitment and treatment of workers, including contractors, avoids discrimination and promotes equal opportunity, especially with respect to women and migrant workers. The project proposes to give preference to employing local workers, enabling the local economy to benefit from the opportunities created by the project.

The project will give women the same access and opportunity for employment as men with the same credentials and experience. The project will monitor the participation of women in its workforce at both management and non-managerial positions, during both construction and operations. Progress will be measured in key performance indicators, and reported back to IFC on an annual basis. The project will encourage the employment of women on the project for both construction and operations, including requesting contractors to promote the equal opportunity approach in their recruitment efforts (ESAP Condition 7).

Grievance Mechanism

The project will establish a worker grievance mechanism covering all workers and contractors that is accessible and transparent, providing timely feedback to complainants without the risk of retribution and allowing for anonymous complaints to be raised (ESAP Condition 8).

Occupational Health and Safety

Central Puerto will ensure that the project and all contractors adopt the same Occupational Health & Safety (OHS) practices and procedures at the project level, integrating critical elements of OHSAS 180001 as relevant. The project and each contractor will be required (by contractual agreement) to have a dedicated OHS Manager and team dedicated to supervising, training and enforcing appropriate OHS practices and procedures among its workers. The client will require the construction contractor to develop an OHS and emergency response plan for the construction phase of the project (ESAP Condition 9).

The OHS plan will include an organizational chart of key OHS personnel, including their roles and responsibilities; a list of training to be provided to workers, and its frequency; processes for reporting and managing work related incidents and accidents; and contingency and emergency preparedness and response measures, particularly during high risk activities like working from heights during the installation and maintenance of turbines and during the installation of electrical components.

Law 24557 governing work related risks require all projects to have an on-site medical facility and basic medical equipment and medication. The project is expected to hire a permanent ambulance service during construction works, to provide basic emergency services and transportation to a medical facility in case of requiring urgent care. All workers will receive training on emergency preparedness and response.

Workers Engaged by Third Parties

The client has hired Ventus as ‘Owners Engineer’ to bring experience in the sector to the project. Ventus will have a dedicated team with permanent presence at the project site, and will be responsible for supervising contractor’s responsibilities and managing the interface with them.

Constructora Sudamericana has been commissioned for civil engineering. Distrocuyo will carry out electrical engineering works and Nordex-Acciona the operations and maintenance (O&M) contract.

At the lenders request, all tender documents included specific requirements on contractors to demonstrate compliance with the project E&S management programs, host country requirements and IFC PS’s. The contractor’s environmental manager and an OHS manager will implement project E&S requirements. While social matters will be managed centrally by the project management team, contractors will be provided with instructions on how and who to report any issues that may arise with local communities or other stakeholders, to ensure that all social matters are addressed in a consistent manner, following the same protocols and procedures, particularly as it concerns the resolution of grievances.

All workers will be required to comply with a code of conduct prohibiting specific behaviors and activities that could put in danger the lives of the individuals themselves, other workers, flora/fauna and members of the local community. The project will require the lead construction contractor to establish a project code of conduct to be read and signed by each worker at the time of hire / induction. (ESAP Condition 10)

Water and Waste Water Treatment

Wind power is the most water efficient source of energy generation because it requires very little of it during its lifetime. Nonetheless, water will be used at relatively nominal levels during construction works and also for domestic and sanitary purposes on site. If using well water, the project will obtain permission from the land owner and a municipal permit for its extraction and use. Water consumption will be monitored during project activities to ensure that it is consistent and does not go above authorized levels for this type of activity.

GHG Emissions

The project will not contribute to greenhouse gases (GHG’s), other than during construction works due to the burning of fossil fuels from the use of vehicles and heavy machinery. The project will avoid approximately 250,000 metric tons of CO2 equivalent per annum based on estimated production of 405 GWh/annum and Argentina’s average grid emissions of 527 kg CO₂ per kWh.

Pollution Prevention

The project will take all necessary measures to provide clean and safe drinking and sanitary water to all workers. Sanitary and domestic effluents will be separated and treated using chlorination prior to disposal in wells or septic facilities approved by the local authorities. Regular physical-chemical and bacterial controls will be carried out to ensure water quality is deemed safe for the intended use, in accordance to local requirements.

The project will implement precautionary measures to ensure that rain or groundwater does not become polluted by oils or lubricants used at the construction site, ensuring these are properly stored, contained and separated in dedicated areas.

The project will implement a spill containment program with its employees to ensure that there is no ground contamination from spills of contaminating substances. Hazardous materials will be stored in containments with 120% of total net capacity.

Noise and air quality levels will be monitored in accordance to local laws and must demonstrate compliance with the EHS Guidelines during construction works. Operations phase shadow flicker and noise have not been identified as an issue warranting detailed study as the nearest residential receptors are located around 2 km from the site. Measures to control air pollution include minimizing the generation of (i) suspended solids accumulated from excessive dust generation both at the construction site during clearing, digging and additionally from transport activities; and (ii) burning of fossil fuels from the use of heavy vehicles and machinery. Vehicles and machinery well receive periodic maintenance to avoid the excessive emission of pollutants harmful and dangerous to humans and local biodiversity.

Solid Waste Management

The project will place metal recipients with covers at convenient places across the work sites for disposal of different types of solid waste, avoiding attracting rodents and animals to the site. The project is responsible for the collection, storing and final disposal of all solid wastes by type, and will seek possibilities for recycling and reuse of materials where possible. Final disposal of wastes is subject to a municipal permit and should be managed by a licensed company.

Community Health and Safety

The project is located in a rural area accessible by public road to the city and port of Bahia Blanca but removed from any human settlements (the closest residence is more than 2 km away). The main impact of the project to the public will come from disruptions to local transit and traffic during the transportation of turbines, heavy machinery, workers and other materials via state roads during project the temporary construction period. The project is responsible for implementing a traffic management plan that identifies safe transport routes to the project, identifies high risk areas requiring specific improvements or extra safety precautions, installs safety signage on public roads, enforces codes of conduct to all drivers, with special instructions provided to those transporting large and heavy loads. Turbines will be transported to the site during late night hours to avoid blocking off traffic on state roads during daytime and peak hours.

The project is responsible for maintaining direct contact and active coordination with public utilities in Bahia Blanca during any construction works that may result in the interruption of services. The project is far enough away from human settlements that it is not expected to have a visual impact, or other significant impacts like shadow flicker, blade throw and/or impacts associated with high noise levels. 

Emergency Preparedness and Response

The transport management plan will include specific emergency preparedness and response measures to be implemented with assistance from local authorities in the event of an emergency. In the event of an accident, the project will take all measures to ensure that impacts to the public are mitigated and managed accordingly. The client will submit the contractor’s traffic management plan to IFC for review; the plan will identify how the safety and security of all those potentially affected during the transportation of project equipment and machinery in public areas will be ensured (ESAP Condition 11).

Security Personnel

The project will contract the services of a private security company during both construction and operations that will take care of access control and asset protection. Security personnel will be unarmed. There are no communities surrounding the project site and security risks in the area are assessed to be low. The client will require the security contractor to screen its staff so as to avoid anyone implicated in past human rights abuses and will ensure that security personnel are instructed on how to interact respectfully with workers and members of the community.

The wind project is sited on an area covering roughly 1500 ha at an inland location with rolling topography, below 100 m elevation above sea level It is located at the interface between the southern end of the pampas grasslands and the southeastern extreme of the chaco woodlands, and contains some natural habitats representative of both of these biomes.  The “Pampas” refers to a grassland biome within central Argentina and Uruguay, characterized by relatively flat topography and treeless terrain. Similar to other subtropical grassland biomes, plant communities are dominated by a variety of perennial bunchgrasses and forbs, and both plant and animal communities are characterized by low diversity, but contain several highly specialized, endemic species.  This biome covers much of the Province of Buenos Aires and has been heavily impacted by domestic livestock grazing as well as crop agriculture.  Within the wind project site, roughly 50% of the area is covered by cultivated wheat fields, which may originally have contained pampas grassland habitat.  At present, roughly 25% of the area is covered by remnant pampas grassland habitat, with signs of heavy domestic livestock grazing pressure, including relatively short and sparse grass cover, and predominance of exotic species. 

The “Chaco” is a tropical/subtropical dry forest biome characteristic of interior South America (Bolivia, Paraguay, Brazil, Argentina), characterized by high levels of endemism and biodiversity in many taxa, including birds.  This project is sited at the southeastern extreme of this biome, where the chaco woodland is referred to regionally as “espinal,” (thorn forest), or “caldenal,” named for two species of short-stature leguminous trees in the genus Prosopis, locally known as “caldenes.”  Within the wind project site, such habitat covers roughly 25% of the area, and shows extensive signs of human impact, reflected by the relatively short stature and open character of the woodland habitats within the area.

The baseline biodiversity studies for this project have been significantly limited by the short period available between the concession being awarded to the client, and the deadline given for financial close and construction, as well as the absence of Argentine requirements related to avian impacts of windfarms. The client hired a regional bird expert to complete a preliminary assessment of bird risk factors associated with the project, based on a short but intensive period (10 days) of field survey effort, combined with a more comprehensive desktop review of available information on the avifauna likely to occur within the project region. A requirement for a more comprehensive, one-year baseline survey effort covering birds and bats has been included within the ESAP, as discussed further below.

Although the natural habitats contained within the project site are heavily impacted, they do contain significant biodiversity values. The project is not located within, or in close proximity to any nature reserves established by either national, provincial, or municipal governments, the site is classified as critical habitat, due to occurrence of 2 highly threatened (IUCN Endangered) bird species within the broader discrete management unit (DMU) that contains the project site. This larger DMU is based on partial overlap of the site with an Important Bird Area (IBA), “Caldenal del Sudoeste de Buenos Aires”. The overlap between the wind project site and this IBA covers roughly 681 hectares (0.21% of the IBA) and includes the locations of 8 wind turbines (3 additional turbines originally planned for this portion of the project area were removed on the basis of discussions between lenders and the developer).

The IBA measures 215,925 hectares, and was established to protect six “globally threatened” bird species (Rhea americana, Phoenicopterus chilensis, Harpyhaliaetus coronatus, Pluvianellus socialis, Gubernatrix cristata, Sturnella defilippii) as well as a variety of biome-restricted and endemic bird species characteristic of the woodland, grassland, and salt lake habitats contained within this IBA. Two of the six species listed above are IUCN “Endangered” (EN) bird species, the Yellow Cardinal (Gubernatrix cristata) and the Crowned Solitary Eagle, (Harpyhaliaetus coronatus).

In addition to the IBA trigger bird species listed above, additional priority species include the Bearded Tachuri (Polystictus pectoralis IUCN NT), three species of geese in the genus, Chloephaga, referred to as “Cauquenes,” (C. rubidiceps, C. poliocephala, and C. picta, all IUCN “Least Concern,” but protected by national law), and the Swainson’s Hawk (Buteo swainsonii, IUCN “Least Concern,” but protected by national law).

Potential impacts include collisions of highly aerial species with turbine rotors, towers, or power lines, electrocutions of raptors that may perch on the structures of the aerial power collection system, and permanent or temporary displacement effects that may occur in woodland-affiliated species as a result of the removal of an estimated 15 hectares of caldenal woodland, or in grassland-affiliated species as a result of the installation of tall structures within a generally treeless habitat.  Comprehensive baseline and operations-phase monitoring requirements have been included within the ESAP, intended to address potential impacts to the priority species, as well as overall collision impacts to birds and bats.

In spite of the presence of critical habitat, the overall wildlife risk profile of the project is considered to be low, though there is a substantial degree of uncertainty in this assessment due to the limited extent of baseline studies conducted for the project at the time of project appraisal.  The rate of bird collisions with the project’s wind turbines is likely to be in the vicinity of international average rates of roughly 5 birds/MW/year, and population-level collision mortality rates are not expected for any of the sensitive/protected species.  The bat collision rate is harder to predict due to more limited available information on the regional bat fauna, and due to the wider extent of variation in bat fatality rates at wind energy facilities worldwide, but there are no protected or otherwise sensitive bat species in the region that could be affected. 

Avian impacts from interactions with power lines (collisions and/or electrocutions) are not predicted to be severe for any sensitive species, as the transmission line tie-in will be sited along an existing transmission line right-of-way, not in close proximity to any wetlands. Electrocution risk on the power collection system and the need for adequate mitigation will be assessed following a full year of bird fatality monitoring during the operations phase.

The scope of subsequent operational based monitoring will be adjusted to be proportionate to the risks observed during the first year of monitoring. Monitoring undertaken during years two and three of the program will at a minimum, meet ARG legal requirements, and will not exceed 3 days of monitoring effort.

Although the project will require the removal of some “caldenal” woodland habitat, a habitat that is associated with the Yellow Cardinal and other potentially sensitive bird species, habitat-related effects associated with the project are predicted to be relatively minor, as the extent of habitat removal is small (roughly 15 hectares), and as this habitat removal will be mitigated through a reforestation effort required by national law (“Ley Nacional de Bosques” Law 26.331), as well as additional, species-specific mitigation measures required by IFC to achieve net gain, specified in the ESAP, in consideration of the presence of critical habitat.

Through engagements with local stakeholders, the company has partnered with biologists from the University of Rio Negro (URN) to implement a Native Forest Reforestation Plan to mitigate impacts to the caldenal that will be cleared for the project. The caldenal will be taken to a local nursery, where it will be transplanted and conserved for reforestation after construction is completed.

The company carried out stakeholder mapping of interested and affected stakeholders in January of 2017. There are no communities located in close proximity to the site. Interested stakeholders include landowners under the proposed transmission line, communities in Villarino and Bahia Blanca,’ civic associations, academia and municipal, provincial and national level governmental authorities. The project will include a formal stakeholder mapping and analysis for the project in the stakeholder engagement plan discussed below.

To date, the company has carried out consultations on the project with government authorities (February 2017) and landowners along the RoW of the proposed transmission line (March 2017). Further engagement and consultations with community and civic groups are planned for mid-April 2017.

Engagement on the part of the lenders included proactive discussions with landowners in the project area, a local bird NGO focused on the locally protected loica pampeana bird species; and Aves Argentina’s, the national partner of BirdLife International in Argentina. The bird organizations were consulted regarding the presence and behaviors of locally protected bird species and the limits of the IBA.

Through these engagements, the company has partnered with biologists in the University of Rio Negro (URN) to implement a Native Forest Reforestation Plan to offset impacts to a samples of the caldenal that will be cleared for the project. The caldenal will be taken to a local nursery, where it will be transplanted and conserved for reforestation purposes. The company also came to an agreement with the local Municipality in respect to the disposal of vegetative cover cleared by the project. These will be given away to neighbors for personal use.

Stakeholder Engagement Plan

The project will prepare and implement a stakeholder engagement plan in line with the requirements of IFC PS1. The SEP will include the stakeholder mapping and analysis; a forward strategy and methodology for maintaining close contact and coordination with key stakeholders; and a grievance mechanism that will be shared with all contractors to ensure concerns and grievances are managed in a consistent manner, and filtered through the same mechanism. The project will nominate someone at the project level to implement the stakeholder engagement plan prior to the start of mainstream construction works and ensure the timely resolution of any agreements and or grievances from stakeholders (ESAP Condition 19).

Grievance Mechanism

The project will maintain an updated list of all consultations with project stakeholders, including a list of participants, location and date of meeting, topics discussed, issues and/or concerns raised and mitigation measures or agreements to be actioned.

Grievances from directly affected persons will be managed directly by the sponsors project manager during construction, and by the plant manager during operations, with assistance from a nominated person managing social issues and engagement with stakeholders during each phase, as necessary. Stakeholders will be provided with a toll free number to speak to a paid service responsible for recording and ensuring grievances are answered, within a reasonable timeframe. The project will include a community grievance mechanism in the Stakeholder Engagement Plan referenced above.

Ing. Ruben Vazquez

Gerente de Energías Renovables

Edison 2701 – CABA  - Argentina

+54 11 43175000

ruben.vazquez@centralpuerto.com