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.
PS 1 - Assessment and Management of Environmental and Social Risks and Impacts
The E&S disclosure package shared with this E&S review summary comprises a project focused Environmental and Social Impact Assessment (ESIA) and Non-Technical Summary (NTS), Environment and Social Management Plan (ESMP), Stakeholder Engagement Plan (SEP), Livelihood Restoration Plan (LRP), Critical Habitat Assessment (CHA), Climate Change Risk Assessment (CCRA), a Human Rights Impact Assessment (HRIA), Biodiversity Management Plan (BMP). The E&S disclosure documents have been completed in accordance with IFC PS and are fit-for-purpose for a solar project of this scale and character, i.e. covering all relevant E&S risks and impacts at an appropriate level of detail. The ESIA and relevant documents are being disclosed with this ESRS. The Project has received the first two stages of approval of the national EIA for construction and will obtain the final approval for operation from relevant regulatory authority (as per ESAP#1) as well as all relevant E&S permits required under local law.
Masdar has a corporate Environmental & Social Management System (ESMS). Masdar’s corporate management system is ISO certified (14001, 6001, 45001) with current certification valid until May 2025. A project ESMP has been prepared, as part of the ESIA which outlines key mitigation measures and processes that will be implemented during the project construction and operations phases to meet national and IFC E&S requirements including the WBG EHS Guidelines. The company has also developed a draft overarching project Construction Environmental & Social Management System (CESMS) for the project. As per ESAP#2, the company will finalize a project construction Environmental & Social Management System (CESMS) for the project company and EPC, appropriate for the scale and specificities of the project, per the general requirements of IFC PS1 and consistent with the ESIA and ESMP. The final cESMS will include an overarching E&S policy defining the project company’s and EPC’s E&S objectives and principles and incorporates relevant policies, procedures, and plans including site-specific construction management plans. These plans will be approved by the company and lenders, prior to their implementation by the EPC contractor. The cESMS will also include EHS monitoring requirements for construction such as monitoring frequency, performance indicators and targets. Contractors/sub-contractors will be contractually bound to follow applicable project E&S requirements, including those requirements within the project ESIA, IFC PS and WBG EHS Guidelines. The company will have the systems and capacity to supervise the EPC contractor's performance while the EPC will do the same on its subcontractor's performance.
The original Project design assumed a short (~30m) Overhead Transmission Line (OHTL) connection from the site to the existing OHTL, and this was included in the original ESIA. Following subsequent grid analysis works by the EPC Contractor an alternative OHTL connection to the north of the site is required to support the main PV project operation. The OHTL connection requires the construction of two branches of 220 kV OHTLs with a total length of approximately 3km. As per ESAP#3, the company will develop an ESIA addendum for the Project which provides appropriate assessment of impacts and relevant mitigation measures in relation to the changes in the project interconnection through a revised OHTL route. The addendum will incorporate new baseline studies as appropriate and include the following additional/updated documentation (as relevant): Critical Habitat Assessment (CHA); Environmental and Social Management Plans (ESMPs) relevant to any new impacts identified; Addendum to Livelihood Restoration Plan (LRP) (and if applicable, Resettlement Plan; updated Stakeholder Engagement Plan (SEP); updated Biodiversity Management Plan (BMP). Any additional mitigation measures identified in the ESIA Addendum (that are not already included in the ESIA or CESMS) will be incorporated in the relevant CESMS Management Plans.
The bulk of the project workforce will consist of contractor and sub-contractor workers. As part of its corporate ESMS, Masdar has developed a Consultants’ & Contractors’ Management Procedure to outline a systematic approach in the tendering, selection, management, commissioning, and demobilization of contractors. The objective of this procedure is to minimize the QHSE risks to employees, contractors, visitors, local communities, and the environment from the work activities of contractors. The company has developed a draft “Subcontractor and Supplier Management Plan” for the project defining their approach to managing the ESHS performance of their contractors and subcontractors during the various project phases. As per ESAP#4a, this Plan will be finalized by the EPC and will be consistent with the general principles described within IFC’s Good Practice Note: Managing Contractors' Environmental and Social Performance. The company will include legally binding obligations in the EPC contract (and subcontractor contracts) to ensure compliance with the requirements of all relevant ESHS management plans contained within the cESMS as well as national and IFC PS requirements (ESAP#4b). The EPC will do the same for its sub-contractors (ESAP#4c).
The CESM outlines the framework for monitoring the EPC as well as subcontractors. As per ESAP#5, the company will prepare bi-annual E&S monitoring report that includes the status of ESAP implementation, LRP implementation, E&S performance and stakeholder engagement activities and resolution of grievances including the contractors’ compliance with the ESMS. These reports will be shared with lenders.
Before commercial operations, as per ESAP#6, the company will develop and implement an Operations Environment & Social Management System (OESMS) acceptable to IFC and consistent with the project ESIA, IFC PS, and national requirements. The OESMS will address all relevant E&S risks including, at a minimum, pollution prevention; water management; hazardous materials; waste management; emergency response; community health; safety & security; biodiversity management; environmental monitoring; stakeholder engagement (including grievance management).
Masdar has a corporate E&S Manager and E&S Experts at the corporate level, but project-specific and site-based staff are in the process of being hired. The EPC contractor has yet to hire relevant E&S staff members. Stakeholder engagement has been carried out by the ESIA consultant. The company will ensure that sufficient staff and contractor resources are allocated to manage the project’s E&S performance at all times. As per ESAP#7 a) the company shall appoint the following qualified E&S related personnel for the project: i) E&S Manager (site-based) who has overall responsibility for environmental, social and health and safety management, compliance and implementation of the cESMS ii) Community Liaison Officer (site-based). 5b) Company shall require EPC contractor to appoint and retain appropriate counterparts to its E&S staff including: i) competent and qualified Health, Social, Safety, and Environment (HSSE) manager and ii) deputy HSSE manager iii) qualified CLO and iv) HSE Officers - the EPC Contractor shall ensure that there is at least one dedicated competent safety professional at a ratio of one (1) for every forty (40) personnel at the site; v) ecologist to implement the BMP.
Masdar has developed a robust Supply Chain Management System (SCMS) to identify, manage and remediate supply chain risks associated with labor exploitation, as well as any other significant environmental and human rights risks and impacts. Masdar is familiarized with labor risks (forced labor and child labor) associated with PV solar panel supply chains from previous projects including with the IFC. The SCMS includes a responsible sourcing policy; mapping and risk assessment of PV solar panel suppliers; specific measures to be implemented in case the mapping reveals potential exposure to forced labor; inclusion of appropriate clauses in procurement notices and contracts with EPC contractors and suppliers on labor risks and management thereof. Records are monitored and audited by Masdar’s Clean Energy E&S team. Per contract, Masdar is entitled to change PV solar suppliers if issues are found and left unresolved. As per ESAP#8, the company will maintain and implement Masdar’s supply chain management system to identify, manage and remediate supply chain risks associated with forced labor, as well as any other significant environmental and human rights risks and impacts. This includes the provided due diligence and management procedures for the sourcing of solar PV modules. For equipment and supplies which will be procured by the EPC, the company requires implementation of Subcontractor and Supplier Management Plan which will be prepared as part of the Construction Environmental and Social Management System (cESMS).
PS 2 – Labor and Working Conditions
During construction, the number of workers at the site will vary according to the activities that are being undertaken. The EPC is expected to hire the construction workers (some through sub-contractors) which will number up to 600 at the peak of construction. This construction workforce will consist of approximately 60% local and 40% foreign workers. During project operations, the O&M Contractor’s (MSTS) direct workforce will be up to 25 people. Masdar has developed several policies defining its commitment to adhere to international labor laws and regulations at a corporate level. At a project level, the company has developed a draft HR Policy. As per ESAP#9a, the company will finalize this human resources (HR) policy and associated plans/procedures according to IFC PS2, International Labor Organization (ILO) requirements, and local labor codes. The policy/procedures will define the company's commitments with respect to labor and working conditions, maximizing local employment, equal opportunities and non-discrimination, anti-sexual harassment and gender-based violence, prohibition of child and forced labor, whistleblower protection, freedom of association, and collective bargaining. As per ESAP #9b, the company will ensure that the HR policy requirements are included in the employee contract to be used by the EPC contractor, O&M Contractor and subcontractors. In addition, they will ensure that written contracts are provided to all construction workers at the beginning of employment in accordance with the CESMS employee contract term sheet. As per ESAP#9c, the company will engage dedicated local HR resources to support the implementation of the project’s HR policies and procedures and the internal grievance resolution mechanism. The dedicated in-country HR resources will be supported by the company’s Corporate HR team. In addition, as per ESAP#9d, the company will finalize an enforceable code of conduct (CoC), which will include measures for preventing Gender Based Violence and Harassment. This CoC will be applicable to all workers, including contracted workers and site workers and also apply to worker conduct within project worker accommodation facilities. All project workers will receive regular training relating to the project's human resources policy, including mandatory training on the Worker CoC. The company will ensure that the HR Policy, as well the grievance forms, contracts, and other worker-related policies and forms are translated into the language(s) spoken by the workforce (including contracted workers) and shared with all employees. In addition, EPC will finalize a Labor and Working Conditions Management Plan (LWCMP) as part of the Construction cESMS (ESAP#2) while the O&M Contractor will develop one for the operations phase (ESAP#6) aligned with IFC PS2.
The draft cESMS Labor and Working Conditions Management Plan includes the establishment and implementation of a worker's grievance mechanism (WGM) aligned with IFC PS2, the implementation of which will be led by the EPC. The project WGM will be finalized and made available to all project workers, including contracted workers. The project E&S staff will disseminate information about its use to the workforce (in a language the workers understand). The WGM will include specific considerations related to the gender-based violence and sexual harassment (GBVH) grievances, as well as an option to file anonymous complaints (ESAP#10).
The company will closely monitor compliance to ensure the EPC and its subcontractors’ adherence to local labor laws, lender requirements, company policies, and project construction management plans. The PMC shall appoint an HSSE Manager for the construction phase who will be responsible for overseeing that occupational health and safety aspects are satisfactorily being managed by the EPC. Appropriate corrective measures will be implemented when non-conformances are identified. An independent Lenders Environmental and Social Advisor (LESA) has been engaged during the construction and early operations phases to monitor ESMS implementation. Additionally, the company will hire a suitably qualified and experienced independent consultant to undertake a labor audit during construction phase to assess contractor and sub-contractor adherence to local labor laws and lender requirements (ESAP#11).
There will be some migrant workforce, most of whom will be housed in rented accommodations in the nearby villages. There is also an accommodation camp planned to be constructed on site (with 250 person capacity). As outlined in the project ESIA, the CESMS and in the EPC contract (as a mandatory requirement), the accommodation facilities will be compliant with the applicable standards, including the Guidance Note by IFC and EBRD on Worker’s Accommodation: Processes and Standards (2009). A draft Workers Accommodation Management Plan has been developed by the company which will be finalized by the EPC as part of the construction management plans (ESAP#2), and will include specifications for the design and management of worker accommodation. The EPC and contractors shall comply with this plan when housing their workforce. Furthermore, as per ESAP#12, the company will conduct an audit of the project-provided worker accommodation facilities before occupancy to assess the accommodation facilities' compliance with lender requirements, and internationally recognized life & fire safety standards. All material non-compliances identified will be addressed before the use of accommodation facilities.
As mentioned under PS1, Masdar has a corporate Occupational Health and Safety Management System (OHS MS) accredited with ISO 45001. The company has developed a draft OHS management plan for the project. The EPC and O&M contractors will finalize and implement site-specific occupational health and safety (OHS) management system, including plans and procedures of a scale appropriate to their scope of work (ESAP #13). The requirements defined within these documents will apply to all project workers, including sub-contractors. All workers will complete basic OHS training, and supervisory staff and employees undertaking high-risk activities will complete specific OHS training.
PS 3: Resources Efficiency and Pollution Prevention
The project is estimated to generate 589 GWh/ year, with greenhouse gas emission reductions of 328,638 tCO2 equivalent per year using a grid emission factor of 0.558 tCO2e/MWh.
For the project, water will be sourced offsite from locally permitted water suppliers, or from municipal water sources, and delivered to site in tankers. No ground water or canal water will be extracted. Based on the project ESIA, the estimated water consumption during the construction phase is expected to be approximately 15,752 m3 per year. The EPC contractor will develop, as part of its cESMS (ESAP#2), a Water Management Plan including measures for efficient use of water. During the operation phase, the estimated water consumption is estimated at 110 m3 per year. To minimize water consumption during operations, the PV modules will be cleaned using dry cleaning techniques. As per ESAP #14a, the EPC will request a confirmation of capacity from municipal water sources to supply water for the project needs without interruption to any local water users.
The project is expected to generate minor to moderate amounts of pollution to air, noise, and soil, during the construction phase which are anticipated to be readily mitigated through the implementation of standard pollution prevention and control measures, defined within the cESMS. As outlined earlier, the EPC contractor will finalize a Project specific Construction Environmental Management Plan (CEMP) in alignment with specification in ESIA and ESMP (ESAP#2). While baseline noise data was collected near the project site during ESIA investigations, adequate noise sampling was not conducted near the access road. As per ESAP#14b, the EPC will collect additional baseline noise sampling data near the project access road for receptors from the Kirlishon and Kulchovdur communities, which may experience increased traffic noise during project construction.
Volumes of liquid, solid, and hazardous waste generated by the project during construction and operations are expected to be low. Domestic wastewater generated will be collected in a septic holding tank and removed by authorized contractors for offsite disposal in a licensed wastewater treatment plant. Solid waste disposal will be managed through licensed third-party waste contractors approved or contracted by the company. The nearest suitable landfill to the project site, is located approximately 120 km from the project site. The nearest hazardous waste disposal and municipal wastewater treatment options are in Bukhara region. As per ESAP#14c, i) the EPC will assess suitability of local waste facilities, with respect to wastewater disposal capacity and hazardous waste. The project will only approve facilities that are licensed by government regulatory body and operated to acceptable standards of safety for human health and the environment. ii) any defective equipment or batteries shall be returned to supplier or safely disposed iii) project shall store any damaged or broken panels onsite until such time as suitable recycling facilities become available.
Moreover, as part of the project cESMS (ESAP#2), the EPC will finalize a project specific Hazardous Material, Waste and Wastewater Management Plan (HMWWP) aligned with local legal requirements, IFC PS3, and WBG EHS general guidelines. The plan will include measures to ensure no contaminated water is discharged to surface or ground water. The project will also identify suitable PV and battery buyback / take back schemes to ensure appropriate disposal / treatment of damaged or end-of-life equipment, if required.
PS 4: Community Health, Safety and Security
The closest populated areas to the Project site are the Kirlishon and Kulchovdur communities (10 and 11km from the site respectively) as well as the Jiydali settlement – small community within the existing Khamza 1 substation compound comprising approximately 7 households (400 m north of the site). According to a letter from the relevant government authority, the Sanitary Protection Zone for the project is 250 m. No communities currently reside inside this zone. Risks and impacts to these communities were assessed during the ESIA process and are not expected to be significant during the operations phase. To minimize any impacts to the local communities during construction, the EPC will incorporate relevant measures in the suite of construction management plans outlined in ESAP#2.
Traffic and transportation risks will also be present mainly during construction phase. These risks may include community health and safety risks from the volume of vehicles and traffic-related accidents along the R78 when delivering materials, personnel and equipment to the site. The traffic impact assessment and consultation have identified the need to manage routing traffic along the R78 highway between Alat and the project site, specifically when travelling through Kirlishon and Kulchovdur communities. The company has developed a draft Traffic and Transportation Management Plan (TTMP) as part of the cESMS. As per ESAP#15a, the EPC will finalize this plan to avoid traffic and transport related risks to project workers and communities during construction, promote safe driving awareness among the project staff, and establish best practices on vehicle management.
The EPC will engage a security contactor to provide security personnel during the construction and operational phases of the project. The EPC will ensure that their security contractors' personnel are appropriately screened, trained and competent for their scope of work. If security guards are required to be armed, this will be only with the advance approval of the project company and security guards will be subject to additional requirements such as training on use of force, etc. A draft Security Management Plan has been developed by the company. The company will require its EPC to carry out a security risk assessment and finalize the CESMS Security Management Plan aligned with IFC PS4 and the Voluntary Principles of Security & Human Rights. The plan will include a Code of Conduct for site security personnel, incident reporting, and investigation process. The company will monitor the implementation of this management plan via regular audits. The project's community grievance mechanism will be available for members of the community or employees in the event of a violation of the CoC by security personnel or other grievance related to security personnel (such as GBVH) (ESAP#15b).
PS5 - Land Acquisition and Involuntary Resettlement
There will be no physical displacement of households as a result of the project activities, however there will be some economic displacement. The land plot allocated to the project has an area of 649 hectares and is a deserted cropless area mainly covered with shrubs. The plot is owned by the State Committee for Sericulture and Wool Industry Development (SWID) which administers pastureland for the Government of Uzbekistan. The company will obtain the servitude/lease rights for the land 30 days after the issuance of Presidential decree. The land lease will be 25 years for the PV project, and 10 years for the BESS component.
Socioeconomic and census surveys of the Project Affected Households (PAH) were undertaken in June 2023. In total, 43 people from nine PAHs were identified as being impacted by the project – one herder and his partner who have a short-term agreement for land use at the project site, as well as seven village households who informally use the project land for grazing without a permit or formal agreement.
The project site area has no permanent users but is used as an alternative seasonal grazing site during the spring months. A portion of land is formally leased for short-term (ten months) by a herder and his partner, who will be impacted by project development. The total size of land they use for grazing is approximately 1,000 ha (which includes the project site). The other land users expected to be affected by project development are the seven households from the Kirilishon community who informally use this land to graze their livestock during the spring months. PS5 requirements will apply to those households who are affected by economic displacement and use the land formally or informally for animal grazing.
The project developed a comprehensive Livelihood Restoration Plan (LRP) during the ESIA process in July 2023 to address any adverse impacts related to the loss of available grazing areas. This LRP is in compliance with PS5. As per ESAP#16, the company will implement key mitigation measures included in the LRP before start of any works on site.
The company will monitor the implementation of the LRP, providing bi-annual monitoring reports to the lenders during the construction phase, and annual reports during operations (as part of annual E&S monitoring reporting). The company will engage a third-party consultant within one year after completion of LRP activities to conduct an audit to assess if all the LRP provisions have been met. The completion audit will include, at a minimum, a review of the LRP mitigation measures implemented by the company, a comparison of implementation outcomes against agreed objectives, as well as verification of whether livelihoods have been restored to pre-project levels (ESAP#17).
PS 6 – Biodiversity Conservation and Sustainable Management of Living Natural Resources
The project site lies in a natural habitat according to IFC PS6 with three priority biodiversity features (plants): the Calligonum matteianum, C. molle, and C. paletzkianum with elevated status on both national and international red lists. Calligonum matteianum and C. molle are listed as Endangered while C. paletzkianum is listed as Vulnerable in the IUCN Red List. The construction, operation, and decommissioning of the project may generate a number of impacts on sensitive biodiversity receptors, including Priority Biodiversity Features and on the Natural Habitat. Impacts may include introduction of invasive species, habitat loss and degradation, disturbance to terrestrial animals, as well as bird collision with OHTL. No impact is expected on national or international protected areas, and no features were identified as Critical Habitat triggers for the project as defined by Lender standards.
The company has developed a Biodiversity Management Plan (BMP) as part of the ESIA package which describes the key mitigation and monitoring measures for biodiversity management as well as the conceptual framework of “No Net Loss” for Natural Habitat and the Calligonum species. As per ESAP#18, the company will finalize the BMP in line with lender comments.
Stakeholder Engagement
A Stakeholder Engagement Plan has been developed for the project, consistent with IFC's PSs and includes a functioning Grievance Mechanism (GM). The SEP includes the mapping, identification, and analysis of stakeholders, including vulnerable groups. The company has implemented a robust stakeholder engagement program throughout the ESIA process, including in-person meetings with key local stakeholders such as relevant government departments and members of the Kirlishon and Kulchovdur communities affected by the project. These included public hearings, focused group discussions and business correspondence. During the development of the ESIA, stakeholder engagement and receipt of grievances was done by the ESIA consultant. However, the GM has now been revised and the company will be managing the GM moving forward. As per ESAP#19, the company will update its existing SEP and GM three months before commercial operations to describe the engagement program and grievance management system that will be implemented during the operations phase.
