Risks and impacts associated with PS5 “Land Acquisition & Involuntary Resettlement”, and PS8 “Cultural Heritage” are not expected for this investment”, as there is no land acquisition or displacement associated with distribution activities implemented and managed by Energuate. The ESMS of the company includes policy and procedures which are aligned to PS 5 requirements and will be followed in the event of any involuntary displacement impacts resulting from the operations of the company. Also, Energuate has a policy on cultural heritage compliant with statutory policy requirements and aligned to IFC PS8. These will be followed and implemented in the event of any impacts on cultural heritage resulting from the operations of the company.   

Environmental and Social Assessment and Management Systems

Energuate's corporate environmental and social management system (SGAS) is developed, but has not been recently recertified under the ISO 9001, ISO 14001 and ISO 45001 standards, and includes (i) policies; (ii) processes for identifying risks and impacts; (iii) a series of management programs; (iv) a defined organizational structure and clear roles and responsibilities; (v) emergency preparedness and response plan; (vi) procedures on stakeholder engagement; and (vii) monitoring and review requirements, largely aligned with IFC PS 1 – 8 requirements. The client is committed to continuously improving its processes and procedures, learning from past mistakes and opportunities for improvement.

IFC’s review noted that the SGAS (company ESMS) is comprehensive but could be improved. Some procedures sit alone and are not integrated or cross-referenced with other relevant parts of the system making them hard to follow and implement.

On ESAP #1 the company will update its SGAS so it is streamlined and will confirm that all programs, plans, procedures, trainings, audit and monitoring programs are aligned with IFC PS requirements.

Policy

Energuate has a comprehensive set of policies on E&S topics, including human rights, indigenous peoples, land acquisition and involuntary resettlement, security and crisis management, stakeholder engagement, cultural heritage and biodiversity conservation that emanate from Inkia Energy and are largely aligned with PS 1 – 8 requirements. All policies apply to both company including contracted personnel, and are disclosed internally including several available on the company’s website. A number of these policies can be consolidated and need to eliminate the occasional reference to non-distribution related activities associated with other subsectors managed by Inkia Energy. The EHS management system includes policies on several EHS topics, including OHS management, contractor management, environmental management, and governance of E&S issues.

As part of ESAP #1 above, Energuate will update and consolidate its E&S policies, so these are specific only to distribution activities and the local operating context, following the principles of plan, do, check and act, and aligned with PS 1 - 8 requirements.

Identification of Risk and Impacts

Energuate’s E&S risk management process considers regulatory, reputational, operational, and technological risks associated with its operations. Risks are identified across activities and facilities and registered in an E&S risk assessment matrix that tracks the probability and severity of the event and classifies it as low, medium or high. The company also has a system to identify and manage E&S regulatory requirements, keep track of legal obligations, and monitor compliance. While not formally part of the ESMS, the company has identified more than 100 risks to monitor associated with a wide range of E&S issues, including work in heights, energized equipment, traffic, security, among others.

As part of ESAP #1 above, the company will revise the risk identification process to include E&S issues that come up in the regulatory compliance matrix, key elements relevant to IFC’s PSs requirements, including an initial high level review of contractor’s management of E&S risks, management of traffic and transportation risks, land use consent and RoW access (obtained by the end-user) and biodiversity risk management, and will integrate the risk identification process of the  ESMS with the required updates, roles and responsibilities, E&S management plans and reference to the specific procedures.

Distribution companies in Guatemala have historically operated without environmental licenses. Recognizing the need to formalize this practice in the sector and better understand the E&S characteristics and risks present in each of the ten regions served by the company, Energuate, in consultation with national level environmental authorities, have chosen to develop and use strategic environmental assessments (SEAs) as the preferred planning tool to guide future network improvement and expansion programs, consistent with host environmental laws and regulations and Energuate’s own policy requirements and practices.

Energuate developed ten SEAs and submitted these to the pertinent environmental authorities during the 2022 calendar year, all pending approvals in 2023. The SEAs include environmental and social baseline studies, impact assessments and management plans designed to streamline mitigation and monitoring measures applied to site specific risks at a landscape level across each region. The SEAs are adequate for their purpose and consistent with international good practice, including PS1, and other relevant PSs like PS6. The SEAs will serve for acquiring blanket approvals for all future network improvement and expansion projects, to be further supported by E&S diagnostics required at the time of project planning, prior to implementation.

Energuate is expecting to receive official definition from the Ministry of Environment for the electrical distribution services managed by DEORSA and DEOCSA. But this process is driven by the Guatemala authority and no fixed date has been established. Based on these, the company will develop and maintain a commitment register that highlights the E&S obligations of the company, and will be available to both, company personnel and contractors.

Climate Change

The company identifies and tracks climate change risks that affect the vulnerability and adaptation of its operations. This process has resulted in the company taking the following mitigation measures, among others: (i) installation of new lighting rods (7,000 units) on electrical components and poles across the country to reduce short circuits that could result in localized fires, (ii) due to high winds, implementation of a series of power line separators to avoid short circuits on lines longer than 500m, and (iii) a reforestation program has been implemented as a mitigation measure against the impacts of climate change. 

Management Programs

Energuate’s ESMS includes plans to manage E&S risks associated with its operations, across its project cycle, and largely aligned with IFC’s PSs, the WBG General and Sector specific EHS requirements, and consistent with Inkia Energy’s E&S framework.

The main management plans implemented by Energuate include: EHS, Stakeholder Engagement, Management of Conflict Communities, Community and Labor related Grievance Mechanisms to the Electric Power Distribution Service, Human Resources Management, Procurement of Third Parties and Suppliers, Contractor Management, Legal Compliance, Emergency Response and Preparedness, Physical Safety and Security, IPs, including informed consultation and participation (ICP) in commercial recovery projects, Cultural Heritage, and Biodiversity Conservation. For other management plans associated with PS3, PS4 and PS6, refer to specific sections below for more details.

Organizational Capacity and Competency

Energuate has a strong operational structure with qualified personnel responsible for E&S risks and impacts. E&S is managed by several functions including: EHS, Safety and Security, Legal, Operations, CR, and HR, among others. The teams work cross-functionally, to ensure day-to-day O&M activities, which are dynamic in nature, function seamlessly with minimal down time or disruption to the service. E&S teams work mostly in the field, with instructions emanating from its corporate offices. The CR team works hand in hand with the legal team to ensure that processes associated with new line expansions, including RoW permits and consents, stakeholder engagement and any agreements that result from these, are done in compliance with national law, the specifications in the user manual, and Energuate’s own policy requirements.

The commercial and EHS teams are responsible for day-to-day management of third-party contractors working on O&M activities, ensuring issues are adequately managed and addressed across worksites and facilities. Contractors demonstrate having understanding of their roles and responsibilities, aligned with the company’s policies and procedures, largely aligned with PS requirements. However, several incidents over the last several years suggest practices around OHS management need to be improved, both, in terms of the company’s oversight of OHS and high-risk scenarios, as well as the contractor’s management of these during line work. This is addressed in more detail under PS2.

Managers are responsible for overseeing teams and ensuring they have the necessary skills and training to perform their jobs safely and in line with internal requirements and national law.

The teams report directly to the CEO of Energuate and Inkia Energy management on restrictions and specific technical considerations, including incidents and high-risk scenarios. Issues are reported to the Energuate’s Board Directors and to Inkia quarterly, or sooner as required.

Emergency Preparedness and Response

Energuate has a corporate Emergency Response Plan (ERP) for each of its facilities. The plans cover potential emergency scenarios (generated by internal and external risk factors, such as spills, fires, criminal activities, and natural disasters), identify emergency contacts and communication flows (internal and with community leaders and government authorities), protocols on the use of equipment, and emergency drills. The company maintains close contact with the local fire department. However, the company and contractors do not have an emergency plan for incidents that could occur while working off-site. As part of ESAP #1, the company will expand the ERPs to include requirements that respond to field (out of the company’s facilities) level emergencies, including traffic accidents, rescue from heights, electrocutions, incidents with third parties, among others.

Monitoring and Review

Inkia Energy and Energuate´s Board Directors has full oversight of Energuate’s management of E&S issues, which it discusses quarterly at the Board level, as within Energuate on a weekly basis, together with all relevant cross-functional teams in the company. Minutes of meetings are maintained and followed up internally until met. The company’s management system has a module to evaluate safety, administrative and quality performance indicators and monitor contractor’s and sub-contractors’ activities and performance on site across all EHS issues, including OHS, training, vehicle maintenance, labor management and workforce performance, among others. Field inspection visits assess the proper implementation of safety procedures, and compliance with national labor laws.

Energuate implements ALERTGUATE, a social conflict early warning system to keep track of both technical and non-technical issues occurring across the network.

As a core function, the commercial and CR teams track performance against KPIs relating to customer recovery objectives, and monitors these routinely as data resulting from the system allows the company to prioritize and plan its O&M activities each month. The system tracks: (i) commercial registry (billing information, payments, information on indebted or non-paying customers, debt reduction plans among others, (ii) minutes of stakeholder engagement meetings, register of participants, including agreements made to resolve conflicts or claims relating to unreliable service, (iii) diagnostics of issues, including safety and security considerations, potential conflict, etc., and (iv) summary of claims or complaints against the service made publicly in the media, social forums, and other mediums. Energuate also consults the National Electric Energy Commission (NEEC) on customer satisfaction rates and monitors KPIs relevant to the sector.

Through its commercial systems, Energuate manages all the claims or complaints that enter Energuate through the different service channels (commercial offices, digital media, telephone service, CNEE, DIACO, PDH, COPADEH, etc.), responding to each one of them in compliance with the deadlines established by the regulator in accordance with the technical regulations of the distribution service.

As part of ESAP #1, Energuate will review the CR procedures to verify proper monitoring of environmental and social risks and impacts that are channelled through the community care and grievance mechanism. 

As of December 2022, Energuate reported having a labor force of 4,308 workers. Of which 580 (13.4 %) are direct employees, 544 (12.6 %) work under third party labor contracts, and 3,184 (74 %) are workers under sub-contracted companies. Approximately 58 % of Energuate’s direct employees (336) are unionized and represented under collective bargaining agreements (see below). The 3,184 workers considered sub-contractors work for 28 different companies.

Human Resources Policies and Procedures

The company has a HR MS that covers workers across all functions and implements Inkia Energy’s Human Resources Policy and Code of Ethics, aligned with PS2 requirements and ILO core labor standards, including provisions on child, and forced labor, non-discrimination and equal opportunity, sexual harassment, the right to freedom of association and collective bargaining.

Working Conditions and Terms of Employment

Energuate employees are provided with contracts describing terms and conditions of employment and working conditions relevant to each occupation. This information is covered in induction and reinforcement trainings. The HR MS also includes personal development plans and requires employees receive technical training relevant to their occupation, including OHS, and other matters. The company works with external provider to assist with training and certification of electricians from local communities through technical colleges. This initiative has a component that promotes female participation, which is highly appreciated by local stakeholders.

Energuate verifies (through a system) that all workers, including those under sub-contracted companies, are covered with a medical insurance provided by the local Social Security system or by a private insurance company, and taxes and fees are paid consistent with national law.

Worker’s Organizations

Energuate works with and has good relationships with three labor unions. The relationship with labor unions is formalized through collective bargaining agreements that cover a diverse range of occupations (electrical system workers, administrative personnel, and commercial workers) with the three unions related to the company: Sindicato Regional de Trabajadores de DEOCSA (40 workers), Sindicato de Trabajadores de DEOCSA (134 workers) and Sindicato de Trabajadores de DEORSA (164 workers). Approximately 48% of Energuate’s employees are unionized. The last collective agreement was subscribed in 2020 and is in effect until December 2022.

Non-discrimination and Equal Opportunity

Energuate has a diversity and inclusion policy aligned with its corporate Code of Ethics. Under such policy, Energuate aspires to be an equal opportunity employer, which recruits, trains, develops, compensates and promotes regardless of gender, race or religion and equal pay for equal work. Energuate's contractors are required to expressly accept to respect, comply and communicate the company’s policies and procedures. Equal opportunity and non-discrimination policy is evidenced through diversity and inclusion policies, programs, and trainings, although due to operational challenges in rural area, lack of female technical talent in the country and low turnover at mid- and senior-level management, it has not been easy to significantly increase women representation in its workforce.

Energuate also has a Harassment Free Environment Policy in which addresses gender-based violence and harassment (GBVH) in the workplace and the respective grievance mechanisms. To further reinforce its effort to prevent GBVH in the workplace, as part of ESAP #3 Energuate together with its contractors, will provide a reinforcement training to prevent GBVH in the workplace.

Worker’s Grievance Mechanism

Energuate has a Code of Ethics that applies to all workers, third parties and suppliers. Compliance with the Code is a requirement, which is attached to all worker contracts, and covered in induction and annual refresher trainings. Inkia Energy manage a confidential Ethics Line (Ethics Point) through an external third party, implemented at each asset level, and applicable to company personnel, third parties and suppliers. The line can be accessed by telephone, email and anonymously. Since not all workers interviewed during appraisal were aware of the Ethics Line or its procedure, Energuate will, as part of ESAP #2, develop a training program and confirm that the Code of Ethics has been widely communicated to both its own and contracted workers, through various means, including induction and reinforcement trainings.

E&S Contractor Management

The company has a process in place for assessing third-parties, service providers and suppliers as part of the tender process, including security services, electrical contractors, building maintenance, amongst others. Energuate’s internal due diligence process reviews legal, OHS and E&S performance and practices of prospective contractors, and quality control. E&S requirements and procedures are included in each contract with a complete annex on EHS requirements. Contractors are required to adopt and implement the company’s EHS policies, standards and procedures, and report on all legal requirements to Energuate. Contractors are required to report performance against these requirements on a yearly basis.

Energuate has a structured management plan to address PS2 issues associated with its core employees, largely aligned with IFC PS requirements, however, it is not clear if the company’s main contractors adhere to similar labor and workforce management requirements consistent with PS2 as IFC was unable to review in detail the contractors’ internal processes and procedures, beyond the information provided by the company and obtained during discussions with contractors during IFC’s appraisal. As part of ESAP #2, the company will review the terms and conditions of its contracts with its main contractors so that such contractors are required to manage their workforce in accordance with IFC PS requirements and applicable laws.

Given the work-related accidents in the last three years among contractor’s workers, and as part of ESAP #4, Energuate will update the current contractor management plan to clearly define oversight responsibilities and accountabilities of for E&S activities carried out by its contractors and subcontractors, consistent with IFC E&S PS requirements, also to address the gaps described below. For contractors working on the electrical distribution system, the revised contractor’s management plan will focus on OHS, traffic safety, reporting of incidents, accidents and near misses by contractors and a Stop Work authority program for workers, and access to Energuate’s grievance mechanism.

Under ESAP #4, Energuate will develop a monitoring and audit program for contractors working in the field, focused on the assessment of high-risk activities associated with electrical work and network O&M (e.g., working at heights). These periodic audits will assess worker and contractors’ compliance with national law, IFC PS E&S requirements and those found in the WB General and Sector Specific EHS Guidelines. Audits will identify non-compliances, ensuring consistent reporting of metrics, and opportunities to reduce risks and mitigate impacts.

Training materials will be updated and used to equip both company personnel and third-party contractors. Requirements in the contractor management plan will be captured in the commitment register and shared with contractors as relevant so they may incorporate these into their own management plans and procedures. As a follow up to the above, Energuate will implement an annual audit program for the safety management of contractor companies, to verify compliance with local legislation and safety procedures required by Energuate.

Occupational Health and Safety 

Energuate has a well-structured occupational health and safety (OHS) management system which is aligned with international good practice (e.g., ISO 45001) and based on corporate guidelines and policies. The system encompasses the activities conducted by the company employees, contractors and subcontractors and is centered on ensuring OHS training and competency of workers, particularly those involved in high risks activities, such as working with energized equipment and live lines, working at heights and electrical safety.

The company has identified key OHS risks and has defined operational procedures and programs. OHS programs are detailed, and there is a comprehensive workplace monitoring program. Periodic medical exams are conducted based on a worker’s occupation and health and safety risks. For occupational health, monitoring results show overall compliance with the local Threshold Limit Values (TLVs) set by the company. Adequate engineering and administrative controls are implemented, and personal protective equipment is provided to employees. Energuate has an online system to report and investigate accidents of own personnel and contractors, with a centralized dashboard to report and identify causes and record the statistics.

Despite having an OHS management system in place, serious occupational health and safety incidents continue to occur and require specific attention to prevent and minimize these becoming chronic issues. Reported fatal injury incidents are all associated with high-risk activities and include falls while working from heights, electrocutions, arc flash burns and vehicular related accidents. The company performs their own internal accident investigations and rely on the external police investigations as well when fatalities occur.

These OHS fatalities and incidents resulting from high-risk operations are reported and independently investigated by Inkia Energy’s management and Board. Energuate tracks performance through indicators related to low and high-risk activities and verifying that corrective actions for unsafe conditions and those associated with incidents are implemented.

Under ESAP #4 explained above, the company will revise the current set of OHS KPIs associated with high risk activities and will  take into consideration the field based hazard analysis findings, including the corrective actions associated with recent incidents during standard O&M activities, and address high incident rates of contractor’s; OHS KPIs for contractors, including the monitoring of lagging and leading indicators; improve the reporting of incidents and near misses, personal protective equipment, and specialized training.    

Resource Efficiency and Greenhouse Gas (GHG)

Energuate, as part of the Inkia Energy Group, follows the group’s policy at identifying actions in the areas of resources efficiency and greenhouse gas (GHG) estimation and reduction.

The Company estimates Scope 1 & 2 of GHG emissions and discloses the obtained results in the annual ESG report of Inkia Energy, which presents the emissions from all activities. The annual ESG report is prepared in line with international requirements. The 2021 Annual ESG report indicates that Energuate produced 2753 tCO2e for Scope 1, and 557 tCO2e for Scope 2, which includes energy consumption and losses in the transmission and distribution grid.

The company has resource efficiency initiatives implemented internally and for its customers. For example, Energuate has advised on the implementation of pilot plans in specific municipalities to replace inefficient street lighting and light bulbs (e.g., mercury vapor, metal halide and high-pressure sodium) with durable and efficient LEDs fixtures.

Water & Wastewater Management

Energuate water supply is obtained from the municipal (potable water) grid. No groundwater or surface water resources are used. The company tracks and reports water consumption in Inkia Energy’s annual ESG report. Water consumption rates have decreased over the years. All effluents and liquid discharges generated by the company are stored in distribution centers; workshops, office buildings and facilities are discharged to the local sewers operated by the local sewage company. The company monitors water quality at oil/water separators, and at appraisal, demonstrated to comply with local law and all parameters in the WBGs EHS Guidelines.

Solid Waste Management

Energuate has a procedure for solid waste management that includes waste reduction, segregation, and disposal through authorized companies. Waste is segregated between recyclable, packaged and hazardous materials and is stored in areas that were observed to be demarcated and well managed. Waste generation during field work performed mainly by contractors is adequately monitored, including a proper chain of custody for hazardous materials. Authorized vendors are audited by Energuate to ensure proper management of their own and contractors’ collected waste.

Hazardous Materials & Waste Oil

Hazardous materials and chemicals (e.g., solvents, paints, cleaning agents, oils) are used in low quantities by the company and disposed by government certified contractors. They are overseen through Energuate hazardous materials procedures, which define OHS and environmental provisions for the safe transportation, handling, storage and use of hazardous materials. Compliance with the provisions of these plans is verified through the company’s assurance process, and if any deviation is observed, corrective actions are defined and monitored to completion.

The company has a protocol in place for the identification, abatement from the site and safe management of the equipment that potentially may contain PCBs. As per this document, distribution team determine if the transformer could be potentially reused or no, based on tests made by certified laboratories. When it is determined that the transformer does not contain PCBs, the used oil is treated as a hazardous waste and dispose per certified contractors.

All transformers assessed containing PCB concentrations above 50ppm are marked and labelled. For this equipment, the company has designated areas to store the equipment, however, some of these are not ideal for this type of contaminated equipment. In 2022, the company executed the export of a portion of the contaminated equipment to Europe, utilizing specialized contractors and certified final disposal companies. Energuate, had not received the certification of disposal at the time of this evaluation.

Energuate has implemented a management procedure for the identification and final disposal of PCBs, with the support of the Ministry of the Environment and a United Nations consultancy, which has allowed it to test more than 8,000 distribution transformers and have disposed, through the management of the Ministry of the Environment, 22 transformers that tested positive for PCBs. The Company will continue to systematically test distribution transformers and dispose any equipment that test positive with the oversight of the Ministry of Environment and abiding all pertinent regulations.

As part of ESAP #5, the company will review all the facilities storing grid removed transformers and develop an improvement / corrective action plan consistent with good international industry practices. 

Community Health and Safety

Energuate’s operations are primarily field based, with a small back-office team, that requires the company to maintain day to day operations with host communities, federal and municipal level representatives across the concession area. The CR and legal teams have customer facing roles, while EHS, the security team and field technicians support O&M activities. Key risks associated with distribution activities, relate to health and safety hazards associated with electric lines and their components, driver safety as Guatemalan roads can be dangerous and of poor quality, and physical security risks associated with threats to personal safety of workers and damage to network infrastructure.

Energuate has implemented several procedures for the management of distribution operations in areas with a high security risk (conflict areas) in compliance with PS4 requirements, which includes adherence to the voluntary principles on human rights and the use of force established by the UN. Procedures are aligned with the company’s policies on Security and Human Rights among others and include processes for managing protests and blockades, social conflict and vandalism, risk mapping and plans.

The company also implements and maintains a plan and procedures to manage and mitigate illegal electricity supply connections, which include stakeholder engagement, plan for conflict normalization, addressing illegal connections, dialogue with conflict communities and clients, social risk assessment matrix in troubled communities, and management of critical issues before key stakeholders, consistent with IFC PS requirements.

Energuate has educational programs to inform communities about health and safety hazards associated with accidental contact and the manipulation of electrical equipment, and is currently working on internal and external educational Communication Campaigns: written media, social networks, commercial offices, digital office, School Talks, Lucymovil, Community Talks, cooperation agreements with hardware stores and construction material distribution centers, posters for Municipalities, short safety messages on tv channels with national impact. The company also informs communities about construction / maintenance activities carried out to power lines, which could pose a risk to them. In the last years, there have been electrocutions of people touching lines inadvertently. Energuate investigates third-party accidents resulting from homeowners attempting to clear trees away from the power lines or installing unauthorized connections to the lines. Some houses are built within close distances to power lines, however, Energuate does not have the authority to move these, only report them to the municipal government in the event there is energy theft or damage to the electrical system or its components.

Energuate has procedures related to management, reporting, investigation, and classification of accidents related to third parties and corrective action plans, as well as actions resulting from investigations are completed by Energuate.

As part of ESAP #6, Energuate will strengthen its communications program to reduce the likelihood of third-party accidents through the support of the municipalities, by updating the community’s communications plan with this information, and to have the risks and issues managed by the CR team, through ongoing engagement with the population.

Traffic Safety.

All company employees and contractors that operate vehicles are trained in defensive driving and on how to inspect vehicles safety and integrity prior to starting a journey. Energuate also implements campaigns to strengthen safe driving conditions of the contractors, and coordinates emergency simulations with the fire department to share experiences on risk management and emergency response.

Energuate’s contractors are responsible for operations and maintenance of vehicles, including electric utility bucket trucks, in the ten regions where it operates, increasing the participation of workers and reducing transportation requirements. To further enhance the company’s safe traffic and transportation practices, Energuate will develop and implement, as part of ESAP #4 a corporate transportation manual for community safety (or CTM), with respective training programs, that include O&M requirements, testing and maintenance of trucks, training and awareness on pedestrian safety, emergency response during road accidents occurring in busy or populated areas and GBVH prevention while working in communities during these events.

Physical Safety and Security

Energuate operates in a high security risk context, prevalent in some areas of Guatemala and influenced by high criminality and poverty rates in both urban and rural areas. It also faces strong opposition from groups who oppose paying for electricity among other utility services, and sometimes resort to protests and violence to block the company from entering their communities. In such events, Energuate works with municipal and national GoG authorities, including human rights agencies to develop peaceful relationships with the communities, allowing the company to enter to restore normal O&M activities. These negotiations often result in agreements that are managed by the company together with the local municipality.

Security Personnel

Energuate has a qualified and experienced in-house security team made up of many security managers, supervisors, and guards, who monitor safety and security conditions across the country and network, from which it develops localized security assessments prior to workers conducting field activities. Energuate’s vehicles use a geographical monitoring system that alerts the company’s control room of their location and any incidents. While some security personnel carry firearms, they are trained in the use of arms and principles of proportionality, aligned with PS4 requirements, and are not authorized (by policy) to use arms or force when engaging with communities. The company’s management plan has appropriate policies and procedures (e.g., a written code of conduct; training requirements; procedures in the event of threats, including community unrest and violence, review of past performance and negative history or noncompliance with the code of conduct) of the security guards, as well as others that ensure effective oversight and accountability of its workforce and security personnel. Security measures are detailed and cross-referenced across the company’s ESMS, including the normal and emergency activities managed by the CR team. Energuate also hires a sub-contracted security firm for its facilities, ensuring these meet international good practices on security protocols and training in line with PS 4 and VPSHR. Third party services are procured for 2 -3 years to qualified firms, in response to a public tender. 

Energuate, in its concession area of more than 100,000 square km, expands and maintains the distribution network mainly through public roads that cover virtually the entire country of Guatemala, with the exclusion of Guatemala City and some other municipalities. As such, the project’s ecological footprint extends into every major ecoregion of the country, from the high-biodiversity wet tropical lowland forests of the north to the montane tropical forested regions of the southern and central sierras and volcanoes, to the tropical deciduous and moist forest ecoregions of the lowlands and foothills along the Pacific Slope and coastal regions in the south.

The Legally Protected Area (LPA) network within Guatemala, collectively covers roughly one third of the surface area of the country, and the internationally recognized Key Biodiversity Area (KBA) network covers roughly 48% of the surface area of the country.  LPAs and KBAs are concentrated within the extensively forested regions of the southern and central mountains, as well as the northern lowlands of the Peten region.

The entire country, and Energuate’s entire power distribution network, lie along the Central American Flyway, which is the most highly concentrated bird migration corridor in the Western Hemisphere, utilized by over 100 species of Nearctic-Neotropical migrant birds. Bird species that utilize this migratory flyway include a variety of different raptor, shorebird, and songbird species. For many of these species, most or all of the global population passes through Guatemala twice per year.

The primary biodiversity impacts of the project include: 1) direct and indirect impacts to forest- associated biodiversity resulting from tree cutting and trimming activities during the installation of new lines and maintenance of existing lines, and 2) likely wildlife fatalities resulting from collisions of birds with existing lines, and electrocutions of birds who perch on the support structures attached to power lines. The potential for this latter impact is more widespread, not restricted to sensitive biodiversity areas, but is not a concern within urban, and high-density residential areas, where raptors are not likely to occur regularly.

The responsibility for biodiversity management at Energuate lies with its safety and environment department, and is governed by a set of biodiversity policies, including some that are specific to Energuate, and some that stem from overarching policies of Energuate’s parent company, Inkia Energy. Related policies cover topics such as avoidance of areas of highest biodiversity risk, impact mitigation measures, such as the use of “ecological” or insulated cables and reducing the need for tree clearing and pruning and conducting environmental impact and risk assessments. Per ESAP #7, the Company will create a geospatial resource with overlays of all its current and planned lines/works with the boundaries of LPAs, as well as KBAs, to further facilitate the screening of biodiversity risks in these areas and to inform decision-making.

Regarding the potential for generating electrocution impacts in raptors and other birds that exhibit a tendency to perch on power distribution poles, per ESAP #8, Energuate will conduct a feasibility study on “raptor friendly” pole/line design modifications and other circumstances and/or limitations which may be feasible to be implemented by Energuate in the future. The study will investigate the regulatory, technical and financial feasibility of implementation design options on primary voltage. The study will also consider priority areas in which to implement modifications in the future.   

Almost half of Guatemala’s population self-identifies as indigenous (IP) of Mayan descent, though a large proportion refer to themselves as ‘ladino’ defined as ‘mestizo’ (mixed of Spanish and Mayan descent), characterized as largely mainstreamed with local society and norms. Access to electricity is a critical service that supports the alleviation of extreme poverty and social exclusion providing socio-economic opportunities and better access to services for the IP population. Project work will take place within many IP communities and bring positive benefits with some minor temporary mitigatable impacts.

All prospective customers of Energuate, including IP’s contact the company, indicating their interest to receive electrification to their village. The CR team manages engagement with IPs through a robust process of ICP, aligned with PS1 and PS7 requirements. Some of Energuate’s CR Team are indigenous and speak various Mayan languages, enabling engagement in a culturally acceptable and sensitive manner. The company’s call center to report issues with the service, and its grievance mechanism, are accessible to IPs through various means and in the local language.

Energuate's policy establishes that when the activities impact IPs in a way that the host community considers relevant and because the activities are of benefit to the communities, it will carry out a socialization and public participation process, in accordance with Energuate’s internal policies and national legislation.

IP communities receive Energuate’s user manual indicating required RoW permits, land use clearances and consents required prior to commencement of any works. Ongoing engagement, including agreements made with IPs, are completed by the CR team directly with the IP group’s leader and accompanied by members of the local municipality.     

Energuate’s stakeholder engagement process is largely aligned with PS1 requirements and consist of both proactive and reactive communication with communities and other relevant stakeholders. The company has completed stakeholder mapping that identifies different audiences and environments, depending on their level of interest, types of impacts suffered (direct/indirect) and influence these have on the operation. The mapping exercise is carried out without any type of exclusion for reasons of gender, race, religion or any other aspect since its main objective is to identify the valid representatives of each community to advance in the process of community dialogue.

Energuate has AlertGuate, an early warning system of social conflicts to keep track of technical and non-technical problems that occur throughout the network. Commercial and CR teams track performance against KPIs related to customer recovery objectives, and routinely monitor them. The system tracks: (i) business record (billing information, payments, information on indebted or non-paying customers, debt reduction among others, (ii) minutes of stakeholder engagement meetings, participant registration, including agreements made to resolve conflicts or claims related to an unreliable service, (iii) information to make diagnoses of conflict, including security considerations, potential conflicts, etc., and (iv) summary of the map of actors and relationship between them, of priority communities for commercial operation, notes published in the media, social forums and other media. As part of ESAP #1, Energuate will review AlertGuate's procedure to confirm the follow-up of non-technical information related to commercial and social claims that are channelled through the ENERDATA written media complaint mechanism.

Energuate is one of few distribution companies in the region that implement a detailed Community Relations (CR) program, to manage customer relationships and concerns on the ground, through extensive and ongoing engagement. The CR team has nearly 100 qualified professionals, many from the local communities and speak local Mayan languages. The team also collaborates with officials at all levels of government and are generally stationed locally in one of the 10 regions served by the company. Stakeholder engagement activities managed by the CR team, with both IP and non-IP communities consists of a robust process of informed consultation and participation (ICP).

CR liaisons diagnose the social risks and map stakeholders present in each locality/community prior to engaging. The team establishes roundtables with community and municipal leaders to discuss how the service works and the requirements that should be met to expand, operate or maintain the distribution network (e.g., evaluation of electrical installations and restarting electric power service, etc.) Discussions are documented in meeting’s minutes, together with any agreements reached during the engagement. Information is registered in AlertGuate, and their implementation is monitored until achieved.

ENERGUATE within its community management process, in order to engage in leading dialogues, seeks to identify the representative leaders within each social unit, based on respect for the investiture that it has granted.

A small percentage of Energuate’s customer base require specialized interventions in conflict and dispute resolution that allows the company to restore its operations and maintenance activities, through peaceful and respectful means. This intervention is managed in coordination with the municipal and federal authorities, with participation from the GoG’s human rights agencies. The GoG’s framework to restore peaceful and good faith relationships with conflict communities is called the ‘Road to Peace’ and aligns with IFC PS1, PS4 and PS7 requirements.

Grievance Mechanism for Affected Communities

Energuate has a grievance procedure and implements it as per IFC PS1 requirements, to manage claims, complaints, and requests related to commercial activities, accessible to all users in several languages and through various mediums (e.g., phone, email, customer offices, CR team, etc.), including all E&S concerns. Complaints relating to technical issues associated with the electricity service must include the individual’s name and contact details for the company to be able to respond and address it accordingly. All complaints are logged, directed to the responsible commercial and CR team liaison and prioritized based on the significance and severity of the issue, given priority to safety and E&S concerns. The company captures and addresses these issues along with any agreements made with stakeholders in AlertGuate, described in PS1.

Energuate promotes its service channels: commercial offices, 24-hour OT Call center as well as the available digital media. Likewise, as a result of the negotiations within conflicting communities, their community managers draw up an Act with the specific requirements.

Ongoing Reporting to Affected Communities

Energuate proactively engages with stakeholders through various means, to keep these informed of service updates or issues, as well as line work (e.g., construction), agreements reached with communities served by the company, active corporate social responsibility programs relating to its reforestation activities or community outreach and development.        

 Contact Person: Paulo Cesar Parra

Company Name: Energuate

Address: Edificio Interaméricas 01010, Diag. 6 10-50, Cdad. de Guatemala, Guatemala

Email: pcparra@energuate.com