IFC’s appraisal considered the environmental and social management planning process and documentation for the Project and gaps, if any, between these and IFC’s 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 implementation of these measures, the Project is expected to be designed and operated in accordance with Performance Standards objectives.
PS1-Assessment and Management of Environmental and Social Risks and Impacts
Axian Energy have developed a Corporate Environmental and Social Management System (ESMS), including an HSES Policy, definition of roles and responsibilities at corporate and asset levels, due diligence and risk management procedures, and a set of management plans, procedures (community health and safety, biodiversity, land acquisition, contractors, stakeholder engagement, grievances etc.) and tools. Monitoring and reporting processes are also well defined. The ESMS provides an adequate overarching framework to manage multiple assets. An ESMS for each SPV is currently under development by the sponsors and will be finalized and implemented prior to project early works (ESAP #1).
In September 2021, GY, the previous project sponsor, commissioned international consultancies to develop ESIAs aligned with the Performance Standards, including high-level Stakeholder Engagement Plans (SEP), for each project site (including associated facilities). The four ESIAs, issued in September 2022, were submitted to the Agence Beninoise pour l’Environnement (ABE) under the national permitting process and Certificates of Environmental and Social Conformity were granted in July 2024.
The EPC contractor’s Group-level management system applies the principles of the ISO 14001 Environmental management systems and 45001 Occupational H&S standards, amongst others, and has achieved certification to these standards for its African subsidiaries. The EPC contractor has experience developing solar projects financed by international finance institutions in Africa. The sponsors will ensure that the EPC contractor implements the ESMPs developed alongside the ESIAs and develops and implements construction environmental and social management and monitoring plans (CESMMP) for each project site. The CESMMPs will define responsibilities of all relevant parties and persons and will include thematic E&S management plans (see ESAP #2). They will include biodiversity measures (as specified below in the PS6 section). The sponsors shall ensure that the O&M contractor updates the relevant ESMMPs for the operation phase.
Adequate E&S clauses, covering labor standards, work conditions, OHS and environmental protection, are integrated in the EPC contract template and will be included in the final EPC contract (ESAP #3). Similar clauses will be included in the O&M contract.
As per Axian Energy’s Corporate ESMS, the Impact and Sustainability Manager holds overall responsibility for corporate strategy and the development and implementation of the subsidiary’s ESMS, while the subsidiary’s in-country HSES Manager is the management representative for the ESMS, and has defined roles, responsibilities and authority for ensuring that Axian Energy’s ESMS requirements are established, implemented, updated and maintained; and that E&S performance is reported to top management for review. The project will establish and maintain an organizational structure that defines roles and responsibilities to implement the ESMS and will hire suitably qualified professionals, including an EHS Supervisor and a Community Liaison Officer for each site (ESAP #4). The sponsors shall also require that the EPC contractor develops an organizational structure demonstrating adequate environment, health, safety and security (EHSS) capacity and a dedicated EHSS manager for each site (as per provisions in the draft EPC contract).
Axian Energy has a high-level Emergency Preparedness and Response Procedure (EPRP) and associated procedures (e.g. hydrocarbon spill intervention procedure) that provides a framework and outlines the requirements for the development of project-specific EPRPs. A project level Emergency Intervention procedure has been developed, but a comprehensive EPRP has not yet been developed for the project. The project shall require that the EPC contractor develops site-specific EPRPs prior to commencing construction works, including measures related to spill response, and will require they are properly implemented and disseminated to relevant parties (including workers and local fire department), as appropriate (ESAP #5). These will be updated as necessary for the operation phase.
PS2-Labor and working conditions
The project will hire approximately 240 temporary workers at construction peak and approximately 36 permanent positions in operations, distributed between the four sites. According to the Concession Agreement, at least 80% of workers during construction shall be Beninese. Most of the workers will be hired by EPC contractors. The draft EPC contract stipulates that the contractor will engage workers from the villages surrounding the project to the extent possible. Given that all plants are located close to towns, it is planned that non-local workers (expected to be about 20-30% of the workforce) will be accommodated in the towns. Workers’ accommodation will be monitored according to the Accommodation Management Plan to ensure safe and healthy conditions.
Axian Group has provided its corporate HR and HSES policies that overall appear to be aligned with best industry practices. The HR policies specifically mention commitment to a healthy and safe workplace, freedom of association and organization for workers, prohibition of the use of child and forced labor, non-discrimination and equal opportunities, prohibition of sexual harassment and retaliation. Axian Energy has an OHS Management Plan applicable to all its collaborators, including sub-contractors, that provides a framework for the development of project-specific OHS Plans. Axian Energy also has a Third Party Management Policy, a Contractor Management Plan and Contractor HSES Requirements that define key labor, OHS, and environmental requirements.
ESAP #1 and 2 require that the sponsors and the EPC contractor develop and implement an ESMS and ESMPs, respectively, including project-specific Employment Management Plans comprising a Local Hiring Plan, Worker Accommodation Plans and a Workers’ Grievance Mechanism, as well as an OHS Plan and a Contractor Management Plan. Axian Energy shall extend its own grievance mechanism to contracted workers as needed (ESAP #9). The Human Resources Policy shall be accompanied by appropriate procedures and monitoring measures to verify the application of its commitments and the implementation of a code of conduct to respect local communities and prevent GBVH and violence against children (ESAP #8).
At the corporate level, Axian Group has a Supplier Code of Conduct (2021) mentioning the key requirements it expects from its suppliers (including human rights, labor rights, health and safety as well as environmental requirements). Axian Energy also has solar supply chain guidelines that outline requirements for risk and compliance assessments. Solar modules will be sourced by the EPC contractor; specific clauses are included in the template EPC contract that address forced labor. The EPC contractor has an Ethical Charter for a Responsible Supply Chain that prohibits forced labor and has a dedicated team that conducts on-site audits of suppliers and contractors to verify application of the Charter. Axian Energy will establish a supply chain management system to identify, manage and remediate supply chain risks associated with the solar supply chain as per PS2, and establish a team of supply chain specialists to perform assessment and management of suppliers and the EPC contractor (ESAP#10).
General health and safety requirements are included in the draft EPC contract, as are references to the Contractor’s Health and Safety (H&S) Management Plan and H&S training plan, to be drafted by the EPC contractor in cooperation with the sponsors. The EPC contractor’s African subsidiaries have QHSE officers and offer certified H&S training to employees.
PS3-Resource Efficiency and Pollution Prevention
Greenhouse gas emissions from the project during construction are expected to be minimal and predominantly associated with the use of fuels such as for generators, transport, on-site equipment, and machinery. The project is expected to generate approximately 35.6 gigawatt hours (GWh) of electricity per year, resulting in a predicted 90% reduction in greenhouse gas emissions compared to fossil fuel sources.
The main water requirement during construction is likely to be water for dust suppression, with some minor domestic use. For the operation phase, water will primarily be required for panel cleaning. In order to minimize the volumes of water used, dry cleaning of panels via brushes will be implemented. Water needs are estimated at a maximum monthly consumption of 200 m3 per site (four cleanings per month). At this stage of the project, several options are possible to cover the water needs: supply by truck, connection to the nearest SONEB (national water utility) network, or installation of on-site boreholes.
The project ESIAs indicate that Water Management Plans need to be developed for each project site. The ESMPs developed as part of the ESIAs include water management measures. As per ESAP #11, the sponsor will i) assess community water availability impacts as part of the hydrological study to be conducted for each site, and ii) develop and implement site-specific Water Management Plans, based on ESIA baseline findings, for the construction and operation phases which will cover water sourcing, measures for efficient water use/water minimization as part of the cleaning needs for panels and for general use, stormwater drainage, as well as monitoring procedures.
During construction, a minor amount of pollution to air, water and soil, and increased noise levels is anticipated; these impacts can be mitigated through standard pollution prevention and control measures that will be outlined in the respective ESMMPs (see ESAP #2). During the operation phase, no environmental pollution impacts are anticipated except for wastewater, primarily derived from panel cleaning, and domestic waste generation. Sanitary wastewater will be collected in septic tanks and transported by a licensed contractor to the nearest municipal treatment plant. The sponsors will implement pollution prevention measures in accordance with national law, IFC’s PSs, and project ESIA and ESMP provisions.
The overall volumes of both solid and hazardous waste generated by the project are expected to be low. The project will produce both non-hazardous wastes, such as paper, wood, plastic, scrap metals and glass, and a limited quantity of potentially hazardous materials such as oils, paints, batteries, etc., as well as some electronic waste.
The ESIAs indicate that project-specific Waste Management Plans need to be developed for the construction and operation phases. As per ESAP #12, the sponsors and its EPC and O&M contractors will develop and implement site-specific Waste Management Plans for the project aligned with local legal requirements, IFC PS and WBG EHS General Guidelines. The Waste Management Plan (for solid, liquid and hazardous waste) will commit to application of the waste mitigation hierarchy and will outline processes for appropriate waste storage, segregation, tracking, transportation, and disposal / treatment. The Plan will also include specifics for management of broken, expired, or surplus PV panels and provide details on hazardous waste disposal solution(s) in line with good international industry practices. Provisions will be included to fully track waste from source to final destination and for selecting third parties hired for waste transport and disposal. An assessment of the suitability of each licensed disposal facility will be undertaken prior to use to verify project waste is disposed / treated in such a manner that it is safe for human health and the environment.
PS4-Community Health, Safety and Security
The ESIAs identify the following impacts related to community health and safety and propose mitigation measures: dust, noise and vibration, waste, diseases (STIs, HIV, respiratory diseases) associated with worker influx, increased sociocultural conflicts / criminality and accidents due to increased traffic or construction works. Worker's influx is expected to be limited and minimized by local hiring (expected at about 70% of total workforce) and accommodation of non-local workers in nearby towns (> 10,000 inhabitants); however, risks related to interactions between non-local workers and communities (conflicts, harassment and GBV) will be considered. The transport of construction equipment and material for the construction of the plants will generate a minor increase in traffic between Cotonou and the project sites (approx. 90 trucks over a 3-4 month period). This movement of large trucks on existing roads may increase the risk of accidents, as well as respiratory diseases due to dust and gas emissions. Access roads to be built for the project are short (200m and 400m for Parakou and Djougou, respectively; only minor access ramps at Bohicon and Natitingou) and do not pass through communities, thus associated impact will be limited. The sponsors shall ensure bypasses and access tracks will be built for the communities of Bohicon and Parakou prior to restricting access to sites (fencing) as per ESAP #13. During the operation phase, road traffic to/from the plants will be limited and will have little impact.
Community health and safety impacts will be addressed in the Traffic Management Plan and the Community Health and Safety Plan to be developed, which shall include measures against pollution, spread of communicable diseases, harassment and GBV, emergency response, awareness raising campaigns for workers and with local communities and a health and safety plan for workers (see ESAP #2). A Code of Conduct will be disseminated among the workforce and enforced. Employment of people from local communities will also be prioritized, where possible (see PS2 section above).
The sites will be fenced, with video surveillance cameras positioned around the perimeter, and a private security sub-contractor will be engaged to provide security services on-site. Axian Group has a corporate Security Framework that refers to alignment with the IFC’s “Good Practice Handbook on Use of Security Forces” and requirements to train security personnel on human rights and analyze and report on grievances from local communities. The project shall prepare and implement a Security Management Plan in collaboration with the EPC and O&M contractors and regularly update it. The Security Management Plan will cover the hiring, equipping, and training needs of security personnel, including: i) vetting of security guards; ii) description of responsibilities of security guards such as controlling access and verification of people entering the site; iii) rules of engagement/use of force; iv) interactions with the project workforce and with the surrounding community (including rules against harassment, gender-based violence and consideration of local sensitivities); vi) duties in case of an emergency at the site; vii) training needs; and viii) regular reporting to project management in case of incidents or grievances received from the surrounding community (ESAP #14). The Plan shall be aligned with IFC’s Good Practice Handbook.
PS5-Land Acquisition and Involuntary Resettlement
The project sites were made available through the economic displacement of 364 PAPs in the four localities. MCA-Benin II was responsible for the expropriation procedures and the release of right-of-way starting from 2015. An international consulting firm developed and implemented a specific RAP aligned to PS5 requirements for each locality in 2017, including compensation and livelihood restoration measures. Livelihood restoration measures and the RAP process were discussed during stakeholder engagement activities in 2018/2019 including through the organization of dedicated focus group meetings with women and the establishment of Local Mediation Committees. A dedicated grievance mechanism was put in place including a channel dedicated to gender issues.
The previous project sponsor, GY, was not involved in the planning and implementation of the displacement, but commissioned a field-based gap analysis for each of the four RAPs against PS5 and lenders’ comments. The gap analyses did not highlight any major gap and confirmed that the RAPs were of good quality.
Based on the report from the IESC site visit in 2022, compensation for the four sites was completed by the end of 2020 (prior to IFC’s involvement in the project), and livelihood restoration and capacity building activities were conducted between 2020 to early 2022, complaints were addressed (+1400) and relations between communities and MCA/consultants are reportedly very good. A post-resettlement report was produced by the consultant in June 2022. Almost 100% of PAPs reported in surveys that they were satisfied with the RAP process (including compensation amounts).
Additional land acquisition was carried out in 2023 (after the IFC mandate) for the access roads and transmission lines in Bohicon and Parakou as well as the transmission lines for the sites in Djougou and Natitingou (land for the Djougou access road was acquired during the earlier acquisition process). During the IESC site visit in December 2024, PAPs reported that all relevant compensations had been paid. No livelihood restoration plan has been implemented for these additional acquisitions. The sponsors are required to obtain an official confirmation from the Government of the completion of the compensation payments and grievance closure (ESAP #15).
As per the Concession Agreement, the Government is responsible for any residual impacts and gaps in the RAP process (including addressing any outstanding grievances) since the end of MCA-Benin II in June 2023. The sponsors have committed to cover potential residual vulnerabilities related to the land acquisition for the associated and ancillary facilities if and as identified by external monitoring/supervision or PAPs grievances in order to align the outcomes with the IFC PS5 requirements (ESAP #15).
PS6-Biodiversity Conservation and Sustainable Management of Living Natural Resources
None of the four project sites nor associated facilities overlap any known protected or internationally recognized areas. The project ESIAs include PS6-aligned biodiversity assessments of each site (including associated facilities). Three sites are modified habitat in peri-urban or rural areas and do not trigger PS6. The fourth site, Bohicon, covers a 50 ha area and overlaps the Guinean forest-savanna ecoregion. It comprises modified habitat with a parcel of less than 5 ha of residual natural habitat, adjacent to a temporary pond. The Bohicon site is located on cultivated and fallow agricultural fields and cashew and palm plantations in a peri-urban area. Expected project impacts include habitat transformation. As part of ESAP#2, the project will update, and implement, its ESMP to include measures for avoidance (e.g., conserving and fencing/cordoning off the area of natural habitat, using wildlife-friendly fencing where relevant, installing signs), minimization, and rehabilitation (e.g., removal of any invasive species; maintenance of natural vegetation under the panels and any other areas under client control) to facilitate No Net Loss where feasible. No significant residual impacts are expected.