PS 6 -Biodiversity Conservation and Sustainable Management of Living Natural Resources - does not apply as the solar parks are being developed in fragmented assemblies of modified habitats and agriculture land, therefore no significant impacts to natural/critical habitats has been identified as part of this Project; PS5:  Land Acquisition and Involuntary Resettlement - does not apply as three out of the four sites selected for construction (Yumbo, Chicamocha and Bolívar) of the solar parks have been owned by EPSA and its precursor companies for the at least the last 60 years and have historically been agricultural and fallow land.   The other property will be leased on a market based transaction in agreement with the current land owner. No physical or economic displacement of people has been identified. PS8:  Cultural Heritage – Does not apply as no potential impacts to Cultural Heritage have been identified in the E&S risk screening conducted by the company. 

This is a Category B project according to IFC's Policy on Environmental and Social Sustainability as the E&S impacts associated with the project are limited, generally project-specific and can be addressed through the implementation of good international industry practices.  

Although this project has limited footprint and solar parks will be placed mainly on land owned by the client or its affiliates, key risks are related to: (i) the protection of indigenous cultural sites at Valledupar solar park that is located inside an area designated to protect indigenous peoples access to ceremonial sites;  ( ii)  labor, OHS and working conditions of EPSA own staff as well as contractors during construction of solar projects; (iii) and potential limited impacts to local biodiversity and negative effects to small portions of fragments of natural vegetation for solar panels sitting

Environmental and Social Assessment and Management System

At a corporate Level EPSA follows its parent company, Celsia, management system. They have in place a well-structured Environmental and Social Management System ESMS covering environmental matters, Social issues, OHS and Stakeholder engagement. The ESMS is consistent with on international standards such as ISO 14001 and OHSAS 18001 and is designed to meet the regulatory framework from Colombia as well as project specific licensing requirements.

Policy

EPSA/Celsia has developed and adopted a corporate Sustainability Policy that states the Company's corporate commitments with: comprehensive development of employees; offering a business portfolio with emphasis on customer service, availability of resources and innovation; comprehensive risk management throughout the business; strengthening relations and channels of communication with stakeholders, based on respect and building mutual trust; Continuously improving processes, considering the contribution to Sustainable Development Objectives (ODS) on which the organization is mainly working. The environmental dimension of the policy includes Celsia /EPSA's commitment to responds to the challenges climate change, eco-efficiency, biodiversity and environmental care.  The social dimension includes their commitment to the comprehensive development of employees, their families and the communities where they operate in order to contribute to improving quality of life and creating environments of mutual benefit, respect and trust.  Finally, the economical dimension, is regard with the ability to create value responsibly to our stakeholders, ensuring the provision of energy effectiveness, quality and efficiency, promote an ethical and transparent behavior, and managing risks responsibly.

Identification of Risks and Impacts

As per its certified management systems, Celsia /EPSA identifies environmental aspects and impacts of all its operational activities, considering physical environmental aspects (water, air soil), biological aspects (fauna and flora), anthropic aspects (health and safety of communities, cultural, economic and landscape), and the use of natural resources, which are reviewed and updated periodically. Likewise, with respect to OHS, the company identifies all hazards and conduct risk assessments for all job positions. This includes all sources of physical, chemical and biological of hazards such as: noise and vibrations; dusts, fumes and gases; heat and welding; electrical hazards; boilers and pressure vessels (explosions), biological agents from ambulatory; working at heights and so forth.  This assessment covers the physical, biological and chemical hazards associated with company operations. After identifying all possible impacts and risks, EPSA analyzes the relevance, likelihood, frequency and severity of all impacts and OHS risks and designs mitigation and monitoring programs to manage these risks on an ongoing basis.

All solar projects in Colombia with installed power capacity above 10MW are required to complete a full Environmental and Social Impact Assessment ESIA, and EPSA has already commissioned qualified local consulting firms to complete the ESIAs for both Valledupar and Chicamocha projects. As set forth in ESAP action #1, EPSA will share with IFC the respective ESIA for public disclosure at IFC website. In addition, for all solar projects EPSA's E&S specialists conduct early field site visits to new project's locations and complete a rapid E&S assessment, identifying key aspects and risks from biotic component (existing vegetation and vegetation loss, birds and other species of animals,  type of habitats and proximity to protected lands); physical dimension (water bodies and watersheds, soil, topography, runoff, seismic activity), and Social component (existence of householders, land use, proximity to neighbors and stakeholders concerns).This analysis is followed by an in depth E&S feasibility study classifying the area according identified environmental and social vulnerabilities (based on existing biodiversity, topography, geology, land use and infrastructure, human settlements). EPSA then complete the land use plan identifying the areas that should be preserved and/or set aside, and the areas can be used for the solar project. 

Management Programs  

At a corporate level, Celsia has defined several strategic goals which are followed by EPSA and translated into specific management programs on 4 different areas: Climate change; Biodiversity; water resource management; and solid waste management. This management programs include: reforestation programs; conservation programs of threatened species of fauna; water efficiency program on hydropower generation; recycling of solid wastes; PCB elimination program; and GHG reduction program. EPSA also has a set of management OHS programs and procedures that are described below in the PS2 section. 

As part of environmental licensing process of the Projects with installed capacity greater than 10MW, it is expected that specific management programs are going to be proposed to mitigate the impacts of the construction of solar projects, such as solid waste management program, archeological protection program (applicable), environmental noise control program (for construction phase), fugitive emissions control program as applicable.

On a project level, EPSA follows corporate ESMS procedure to ensure adherence of the service providers and EPC contractors to Celsia /EPSA's own EHS policies and procedures, which includes among other topics License requirements, accidents/incidents, community engagement, basic induction training for workers, EHS accountability matrix, water supply, construction wastes, hazardous wastes etc .

Organizational Capacity and Competency

At a corporate level, Celsia is organized in two different business units covering energy generation and transmission and distribution throughout EPSA . The solar power projects are currently being held by EPSA transmission and distribution unit instead of power generation. At a corporate level, there are two E&S coordinators at each business units. In the transmission and distribution unit there is an E&S Leader with a team of  8  analysts reporting to him (5 environmental and 3 social). This team is responsible for the licensing process, risk assessment, monitoring, management programs and internal audits.

There is a similar structure managing OHS matters and reporting to the human resources. 

Emergency Preparedness and Response

EPSA has developed emergency response plan for Yumbo project that is already under commercial operation and will be the reference for the future solar developments. The Emergency response is very comprehensive and covers the legal requirement framework, resources for emergency response, an assessment of threats and vulnerability of people, resources and systems. As a result, a final risk assessment and determination is made. There is a description of the emergency brigade and roles, training and periodic testing of the equipment. Finely, a set of emergency procedures are set for a variety of emergency scenarios.

Monitoring and Review 

EPSA has a system to monitor compliance of its business activities with relevant environmental regulations covering use of water, wastewater discharges, hazardous materials, and PCBs, hazardous wastes, solid wastes, air, soil, fuel, energy, consultation, stakeholder engagement and archeology, as applicable. EPSA also monitors key performance indicators and completion of specific pre-defined targets. Under the ESMS framework EPSA conducts periodic site visit audits and assess contractors' performance                                                

     Working Conditions and Management of Worker Relationship

As of August 2017, Celsia, EPSA's parent company, had approximately 1,550 direct employees, of whom 75 percent are men and 25 percent are women. Of the total number of employees, 15 percent of specialist level or above are women, 36 percent of managerial positions are occupied by women and 39 percent of director level. In addition, approximately 100 third-party workers will be hired by the company through contractors for the solar projects' construction.

Human Resources Policies and Procedures

Human Resources (HR) Policies and Procedures, Working Conditions and Terms of Employment 

EPSA follows Celsia's corporate of policies and procedures applicable to all employees that reflect the Colombian labor code (known as the Código Sustantivo del Trabajo), which are consistent with PS2. Regular working hours arrangement are 44hs per week, which can be extended to 56hs if overtime is required and with additional increased compensation. Although two days of rest per week are granted to all workers, if overtime is required a minimum one day is mandatory. All workers have the right of 15 annual leave days, sick leave, and maternity leave.

The company offers its workers all basic benefits guaranteed by Colombian law. The company provides a compensation package agreed in the collective agreements with the labor unions, and additional benefits in order to attract and retain high-performing staff, including a compensation system based on performance and results, including life insurance, healthcare assistance, daycare assistance, and retirement funds. The company prioritizes local hiring and, whenever possible, in-house recruitment.

EPSA also follows Celsia  Code of Conduct, an Human Rights Policy and a Code of Conduct for Contractors (Similar of its own) that lay out the ethical principles to be observed in order to avoid violations or actions that compromise human rights and/or workplace relations, including corporate governance, integrity, equality, transparency, professional appreciation, and sustainable development aspects. The Code of Conduct is communicated to all new employees during the induction process, and specific training programs associated with the code are conducted throughout the year. EPSA relies on Celsia's management committees (Comité de Convivencia Laboral, Comité Laboral, Comité para la Gestión del Pacto Colectivo), which include executive directors and managers, have overall responsibility for the implementation of the EPSA's codes and policies. Any ethical misconduct or violation of the codes is communicated to a manager, submitted to the Conduct Management Committee, and/or registered in the external ombudsman channel.  http://www.celsia.com/es/L%C3%ADnea-de-Transparencia

Workers' Organization

As per the Colombian Labor code (Código Sustantivo del Trabajo) and as determined in the company's Code of Conduct, employees have the right to freedom of association and collective bargaining. EPSAs employees are registered with and represented by unions. In 2016 73% of Celsia's employees were covered by collective agreements.  The company fully abides by the terms of salaries and benefits negotiated through collective bargaining.

Non-discrimination and Equal Opportunity

Although EPSA explicitly stands against discrimination in its policies, Colombian labor laws prevent women from working on overnight shifts and doing some hazardous works (including electrical hazards), which restricts some possibilities of work for women in EPSA. On the other hand, Colombia has a set of laws that protect individuals, or a group of people, from discrimination, which EPSA abides. 

Grievance Mechanism

Generally, grievances can be channeled to HR staff directly, but if confidentiality is required and specially if related to EPSA's Code of conduct, it can be lodged on  a Transparency Line, which consists of a telephone channel and an e-mail available for shareholders, employees, suppliers, contractors, customers and the public to inform in a confidential way the alleged breach of the Code and the lack of ethics in business. Grievances are channeled to three committees as appropriate: Labor Acquaintanceship Committee, for resolutions of internal conflicts; Labor Committee, as defined in collective bargain and for the cases that needs labor unions intervention regarding labor/worker's rights; and finally Collective Bargain Management Committee, that is specific for the issues covered in these agreements.    

Protecting the Work Force

EPSA abides by all legal prohibitions against under-age employment, forced labor, or any kind of irregular work. Minimum age of employment at the company is 18 years old, except for apprentices, who can range from 15 to 18 years of age. The Apprenticeship Program is highly regulated and young workers are required to be enrolled in school and to take formal training. The Program stipulates a maximum of six hours of work per day and prohibits night work and hazardous or unhealthy work for all apprentices below the age of eighteen 

On the other hand, the commercial contract signed with the contractors establishes the obligation to comply with the labor regulations. To this end, policies that protect wages and social benefits in favor of their workers are constituted in order to guarantee the effective payment of their rights. In addition to the above, there is an internal area of contractor management that performs periodic monitoring and audits with the objective of guaranteeing both compliance with the object of the contract, as well as complying with its labor obligations and the Law in general.

Occupational Health and Safety

EPSA follows Celsia's formal management system covering OHS matters including the following elements: Policy, leadership commitment, risk management, competence and training, emergency preparedness, accidents report & investigation, recording and knowledge management, communication, audits & management of results, and change management. 

EPSA conducts OHS risk assessment of its operations and risks are classified based on its probability of occurrence

and severity.  EPSA explores options to first eliminate the sources of risks and then, if not possible, they follow an

hierarchy of risk mitigation measures implementing engineering solutions, administrative measures, and as a last choice providing personal protective equipment (or a combination of measures). At a corporate level, Celsia reported Lost Time Injury Frequency Rate LTIFR (# of accidents per million worked hs) of 9.1 for its direct employees and 40.28 for contractors. While Celsia's internal performance is considered very high when compared to average performance in developed countries (4.5 in US), performance of Celsia's contractors is critical (10X above average in US). EPSA has just recently hired a highly-qualified consulting firm (DuPont) to identify opportunities to enhance OHS governance and improve current OHS performance and as a set forth in ESAP #2, EPSA must provide a copy of the report from DuPont with applicable measures to improve EPSA's OHS performance and a plan for implementation.  

 EPSA has in place series of occupational safety procedures for hazardous works such as Hazardous energies control (electrical hazards), welding and hot work, working at heights, confined spaces, excavations (construction) and demolition of infrastructure, tunnels construction, use of explosives, cargo lift, working with radiological sources, operation of machines and vehicles, among others.

All these requirements are gathered in a book for contractors that is annexed to the contracts with construction firms. EPSA/Celsia conducts periodic audits off all contracts covering engineering aspects, schedule of completion, budget and costs, quality aspects, environment and OHS. A final aggregate performance rating is assigned to contractors based on the sum of results from individual performance factors. Going forward, and as set forth in ESAP action #3, Celsia /EPSA must enhance its current audit and supervision procedure, including individual scores for contractor's environmental and OHS performance (Satisfactory, partially Satisfactory and Unsatisfactory). As a minimum, if contractors are found violating rules for hazardous works or activities found to have not acceptable risks in the hazards and risks assessment (Matriz de Riesgo), their performance should be rated as unsatisfactory.  Celsia /EPSA must also define, as set forth in ESAP action #4, a matrix of consequences for non-performing contractors, including increased frequency of the audits and oversight, and contractual penalties for repeated violations.  

Workers Engaged by Third Parties 

EPSA relies on several contract firms for construction and maintenance of power generation facilities, transmission lines and substations. EPSA follows Celsia's series of labor requirements for contractors gathered in the Manual for Contractors, which is annexed to contracts and are legally binding. These requirements include demonstration of existence of reliable labor management system, evidence of compliance with social security deposits, existence of labor written contracts for all employees, compliance with applicable labor laws and terms of employments regarding working time and overtime, rest days, annual, sick and pregnancy leave, compensation and so forth.

Water Consumption :  During construction, small amounts of water will be used for dust suppression on roads, for worker's hygiene, and drinking water. Water will be supplied by wells or trucks.  During operation, the company has no plans to use water for washing the panels given the positive natural water balance of the region and the relatively high frequency of rainfalls which will serve to naturally wash the panels. 

Greenhouse Gas Emissions : During full operation of 4 parks, the project will generate 395.31 GWh/y and it is estimated to achieve 158,519 tons CO2eq per year of avoided emissions, based on an emission factor of 0.401 Ton of CO2 per MWh for Colombia using an index provided by a National Energy Authority (UPME Resolution 843 from 2016). 

Solid Waste Management : All construction sites must have a waste management programs to minimize generation and management procedures through to disposal. Hazardous wastes will be handled and disposed of by authorized companies. During operation, the project will not generate any type of solid, liquid or gaseous byproducts and will not emit noise or use non-renewable resources.

Security Personnel

Colombia has a history of armed social conflict.  Although the country is now under a peace process, security is still a concern and EPSA relies on armed security personnel controlling the access to their offices and facilities.  Security services are provided by specialized firms that receive special training according to Colombia law and EPSA's own corporate requirements. As set forth in the ESAP action #5, EPSA will develop and implement a Code of Conduct for security personnel including provisions on how to respond to threats guided by the principle of proportionality.  As part of their Community Grievance Mechanism, EPSA will provide a means for communities to raise issues about the Company's security arrangements or personnel                                                                                          

The Valledupar solar park will be built on private lands located in the foothills of the Sierra Nevada de Santa Marta National Park. Much of the Sierra Nevada is ancestral territory to four Indigenous Peoples (IP): Koguis and Arhuacos. In 1973, the Government of Colombia recognized a large section of this area surrounding the Sierra Nevada, including much of the city of Valledupar itself, as important for IP ceremonial purposes. While careful to specify that legally acquired existing property rights would not be affected, Resolution 02 of January 4, 1973 created a “Black Line” (“Linea Negra” in Spanish) within which land owners cannot prevent IP's access to traditional ceremonial sites for religious purposes. This resolution was updated by Resolution No. 837 of 1995) to require prior consultation with interested IP communities as part of the environmental licensing process. 

As part of their environmental and social due diligence process, EPSA recognized the applicability of these resolutions, and began to engage in the detailed consultation process required by Colombian law. This process included a review of previous and on-going consultation processes in the Sierra Nevada region, followed by multiple face-to-face dialogues with IP representatives. Beginning in November 2016, these sessions explained project benefits and impacts, discussed expectations and mitigation measures, and eventually lead – in June of 2017 - to agreements on a mutually satisfactory process to achieve certifiable consent for EPSA to develop the project. Key items of these agreements include EPSA's commitment to establish a community development fund, support rural electrification, and guarantee continued access to all IP ceremonial sites. This consultation process and the agreements reached are documented in the Valledupar solar park Environment and Social Impact Assessment (ESIA 

    EPSA follows Celsia's ESMS procedure for information, participation and consultation with stakeholders and affected communities, which is triggered as early as the initial development for any new project. The procedure covers areas such as stakeholder mapping and identification of affected communities, engagement strategies, relationship and communication channels, formal process of consultation with IPs, documentation of consultation process and compliance with stablish regulatory requirements. The procedure is very comprehensive and consistent with IFC PS1 requirements. EPSA also have a procedure defining how complaints should be received, recorded, treated and responded (Gestion de Comunicaciones, peticiones y Quejas). Complaints can be lodged at EPSAs webpage ( http://www.EPSA.com/en/contact-us ), by phone ( 018000 112 115) or email ( servicioalcliente@EPSA.com

  EPSA follows Celsia’s ESMS procedure for information, participation and consultation with stakeholders and affected communities, which is triggered as early as the initial development for any new project. The procedure covers areas such as stakeholder mapping and identification of affected communities, engagement strategies, relationship and communication channels, formal process of consultation with IPs, documentation of consultation process and compliance with stablish regulatory requirements. The procedure is very comprehensive and consistent with IFC PS1 requirements. EPSA also have a procedure defining how complaints should be received, recorded, treated and responded (Gestion de Comunicaciones, peticiones y Quejas). Complaints can be lodged at EPSAs webpage ( http://www.EPSA.com/en/contact-us ), by phone ( 018000 112 115) or email ( servicioalcliente@EPSA.com )                                                                                      

  Juan Felipe López Pineda

Sostenibilidad

Teléfono (574) 326 66 00 Ext.14680

jlopez@celsia.com