Project Name Guatemala-Pantaleon, S.A. and Concepcion, S.A.

Region LAC

Sector Agribusiness and Infrastructure

Project No 004216




1. Pantaleon and Concepcion, which are part of the Pantaleon Group, are two privately owned sugar cane growing and milling facilities located west of Guatemala City. The proposed project involves the upgrading and expansion of Pantaleon''s and Concepcion''s cane growing and processing facilities, as well as installation of power generation units at both plants. The power generation units will supply electricity to the national grid and hereby participate in the scheme set-up by the Government of Guatemala to encourage private power generation to fill the gap between current electricity supply and future power needs in Guatemala. The power generation plants will for approximately half of the year be fueled by waste bagasse from the two sugar mills.

2. This is a category B project according to IFC''s environmental review procedure because specific impacts may result which can be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria. The review of this project consisted of information submitted by the project sponsor and the technical appraisal and site review completed by IFC''s Technical and Environment Department staff. The following potential environmental, health and safety impacts of this project were analyzed:

• air emissions;
• liquid effluents treatment;
• use of liquid effluents;
• solid waste utilization;
• land use restrictions;
• pesticide application and handling; and
• occupational health and safety.

The information provided about how these potential impacts would be addressed in the Pantaleon and Concepcion project is summarized in the paragraphs that follow.

3. As part of the project, flue gas treatment systems will be installed to remove particulate from the off gas. A consulting company is measuring current stack emissions and preparing design options for limiting the air emissions. One of these options will be chosen and implemented, hereby allowing the facilities, as part of the project, to comply with World Bank guidelines. Ambient air quality (particulate and sulfur dioxide) has been monitored in April and May 1995. The monitoring data, which represents a harvest season result, comply with World Bank guidelines for ambient air quality. Pantaleon and Concepcion have agreed to change to low sulfur fuel during the project implementation, should this be necessary for bringing the two plants into full compliance with World Bank guidelines.



4. Wastewater from the two plants are treated in screening processes to remove solids and bring BOD down. The wastewater is hereafter directed to the sugar cane plantations for use as irrigation water. Solid wastes from the screening processes consist mostly of sand and soils and will be spread as soil improver in the sugar cane plantations.

5. Solid organic matter, mainly bagasse, from the sugar milling process is used as fuel in the power generation units throughout the harvesting season. The harvesting season lasts for approximately six months, the remaining part of the year the power generation plant will be using fuel oil.

6. New land brought into sugar cane cultivation will be taken from open pasture land that is used for cattle grazing or cotton cultivation. Land clearing will be minimal and in the event a tree is to be removed, then by local regulation, three new trees will be planted. This regulation, which will be followed strictly by Pantaleon and Concepcion will ensure that no deforestation will result from the project or future expansions of the plantations.

7. To limit the use of pesticides in the plantations a fungus (Metarrizium) is being introduced to kill insects. However, in approximately 3% of the area beatles are causing problems necessitating malathion spraying. Ripener (Round-up) is applied just before harvest. Due to the density of the cane vegetation, the spraying is carried out as plane application. To avoid carry over from wind drift, spraying is only done on days without wind, and never out to the edges of the fields. Approach and edges of drainage channels have dense and green vegetation. This verifies that the aerial applications are done according to the described principles and in careful consideration of wind drift problems.

8. Personnel involved in the spraying of the sugar cane fields are trained in use of the specific chemicals. All applications are carried out in a way avoiding personnel contact
with the chemicals.

9. IFC will ensure ongoing compliance with World Bank environmental, health and safety policies and guidelines during the life of the project by evaluating monitoring reports submitted annually to IFC by Pantaleon and Concepcion and by conducting periodic supervision.

10. Based on its review of available information regarding potential environmental impacts and proposed mitigation measures, IFC concludes that Pantaleon and Concepcion''s proposed project is designed to meet World Bank environmental, health and safety policies and guidelines, and host country requirements.