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 Greenville Group of Companies (the “Developer”) initiated the project from 2017 to 2023. In June 2024, the borrower purchased the project from the developer. The developer completed initial environmental permitting and submitted a national Environmental Impact Assessment (EIA) to the Volyn Regional State Administration, Department of Ecology and Natural Resources in 2021, which was approved. Furthermore, due to changes in the project design, a supplementary EIA was developed in 2022, which was updated in 2024. Registered users can access this EIA at the national online platform “EcoSystem” website https://eco.gov.ua/.
The borrower also engaged an external consultant to conduct an E&S Red Flag report in December 2023 to identify any significant risks/potential impacts and assess aspects of the site that may require further investigation through an ESIA. Subsequently, the same consultant was engaged to conduct an ESIA, including the development of a non-technical summary (NTS), a SEP, and a framework ESMP to international requirements, including IFC PSs. The lenders (including IFC), together with the IESC, further identified additional assessments (e.g., noise, water) and actions to ensure alignment with IFC’s PSs. IFC and the borrower will disclose the final version of the ESIA (including aspects such as noise, water) once in-country public disclosure restrictions are lifted. Supplemental assessments (e.g., livelihoods, shadow flicker, transport) to fill remaining gaps are included in the ESAP.
Construction and operations phase E&S management and monitoring responsibilities will be shared between the borrower and its main contractors. GNG has corporate-level E&S policies applicable to the project; the project's environmental and social management system (ESMS) is currently under development. A series of construction phase ESMPs have been prepared, which outline key mitigation measures identified via the ESIA and processes that the borrower will implement during the project construction to meet national and IFC E&S requirements. As per ESAP#1, the borrower will further refine and implement its project ESMS, including consideration of the final ESIA and the outputs of any relevant supplemental assessments (e.g., ESAP 12, 13). It will be appropriate for the project's scale and complexity and aligned with the requirements of IFC PS1, consistent with good international industry practice (GIIP) per relevant WBG EHS guidelines and local requirements.
As part of its project ESMS, the borrower will update the project’s commitments register to list all environmental and social commitments made by the borrower in the relevant ESIA documentation and supplemental assessments and through acceptance of the national permits and legal agreements stipulated by the Government of Ukraine. The commitments register will specify which entity (borrower, specific contractor, or multiple contractors) is responsible for implementing each commitment (ESAP#2). Project contractors, including sub-contractors, will be required to implement those portions of the borrower’s project ESMS that fall within their scope of work as described in the framework ESMP and further specified in the construction phase ESMPs. The borrower will include legally binding obligations in its construction and O&M contractor contracts to require compliance of the contractors (and their subcontractors) with IFC PSs, relevant WBG EHS Guidelines, local laws, ESIA commitments, and the outputs of any relevant supplemental assessments conducted as part of this ESAP (ESAP#3).
Before commercial operations, as per ESAP#4, the borrower will develop and implement an Operations Environment & Social Management Plan (OESMP) consistent with IFC PSs, relevant WBG EHS Guidelines, national requirements, ESIA commitments and the outputs of any relevant supplemental assessments conducted as part of this ESAP. The borrower will require its main O&M contractor(s) to develop implementation plans aligned with the OESMP and applicable to its scope of work.
The borrower will ensure that sufficient staff and contractor resources are allocated to manage E&S performance at all times. The sponsor has corporate-level E&S resources who will provide project oversight. At a project level, the borrower has engaged a full-time environmental lead and health and safety lead to oversee construction activities. As per ESAP#5, the borrower will engage a Community Liaison Officer (CLO) and additional resources, as required, to ensure E&S oversight. The borrower will require its contractors to appoint sufficient counterparts to these staff, including appropriate Health & Safety Officers, to ensure satisfactory oversight of their workforce and the project construction activities.
During operations, the borrower will retain adequate E&S resources to implement its OESMP and shall require its O&M contractor(s) to employ adequate support staff to ensure E&S oversight of its activities and implement applicable project commitments. Additionally, the borrower will engage adequately qualified and experienced biodiversity resources to coordinate and oversee its biodiversity program(s) (refer to PS6 section) (ESAP#6).
As per ESAP#7, the borrower will develop a Contractor Management Plan (CMP). The CMP will define the borrower’s approach to managing the E&S performance of its contractors and their subcontractors during the various phases of the project. The borrower will implement the CMP and monitor its implementation in line with the project ESMS and OESMP monitoring provision.
PS 2 – Labor and Working Conditions
The number of workers during construction will vary according to the activities undertaken. During the peak of the construction, approximately 200 - 300 workers are expected to be on site. Most of the workforce during construction and operation is anticipated to be Ukrainian nationals, most of whom are expected to be from the local region. Some expatriate workers, predominately Turkish nationals, will be involved. The workforce requirement during operations is anticipated to be approximately 20 people.
GNG has established several corporate-level human resources (HR) policies and procedures that define its commitment to international labor laws and conventions that apply to the project. Additionally, the borrower has developed a project-specific HR plan aligned with IFC PS2, International Labor Organization (ILO) requirements, and local labor codes applicable to all project workers. Terms of employment will meet national and IFC PS2 labor requirements and be included in employee contracts. Furthermore, the HR plan includes a code of conduct that applies to all workers and includes elements on labor and working conditions, interaction with affected communities, behavior after working hours, etc. The project will not use child or forced labor at any time. Proof of identification and age will be required at the time of employment. During the project's construction and operational phase, the borrower will closely monitor compliance against the requirements defined within their HR plan and will implement corrective measures when needed. This monitoring will be extended to contractors.
As per ESAP#8, the borrower will update and implement its project-level worker's grievance mechanism in accordance with IFC's PS2 and national law. The WGM will be available to all project workers, regardless of their employer or employment status. The WGM will include specific considerations for receiving gender-based violence or harassment (GBVH) grievances via a dedicated and trained focal point, with support mechanisms also available and documented in the procedure. The borrower will appoint an adequately trained grievance officer (including detailed knowledge of Ukrainian labor law and GBVH) to attend to the worker grievances and coordinate the implementation of the WGM. The borrower will make available information on its WGM communication channels in all facilities accommodating project workers.
The project's accommodation strategy for non-local workers is still being finalized. An existing hotel is being used (and will continue to be used) by the borrower’s main contractor to accommodate workers. Additionally, offsite accommodation units are being established by the main contractor to accommodate further project workers. At the time of IFC’s review, the borrower’s electrical contractor assessed the availability of hotel/apartment accommodation for its non-local workers within the region. The borrower's HR Plan contains a worker accommodation policy; however, it is not fully aligned with IFC PSs. As per ESAP#9, the borrower will further refine its worker accommodation policy, establishing the basic requirements that any accommodation implemented as part of the project (including contractors and subcontractors’ facilities) should comply with, in line with Ukrainian regulations, IFC PS2 requirements, and the relevant IFC's and EBRD's Good Practice Note on Workers' Accommodation. The borrower will conduct an audit of project-provided worker accommodation facilities before occupancy. The audits will assess the accommodation facilities' compliance with local codes and regulation and IFC requirements and whether they are designed, constructed and operated in accordance to internationally accepted life & fire safety standards, and to ensure adequate considerations related to security and gender aspects. The borrower will implement the corrective actions identified by the audit.
GNG has a corporate Occupational Health and Safety Management System (OHS MS) and has developed a project-specific OHS Plan defining project OHS obligations applicable to all workers, which will be further refined and implemented as part of the borrower’s project ESMS (ESAP#1). The borrower contractually requires its contractors to develop and implement site-specific OHS plans and procedures of a scale appropriate to their scope of work. The borrower will assess the adequacy of their contractors/subcontractors' OHS plans and ensure any deficiencies identified are addressed before their mobilization to the project site or corrected within an agreed timeframe.
PS 3 - Resources Efficiency and Pollution Prevention
The project is estimated to generate about 396 GWh per year, with greenhouse gas emission reductions of c. 255,000 tCO2 equivalent per year.
The volume of water for the project’s construction phase has yet to be defined. It will be sourced from municipal sources via an existing pipe network. The updated ESIA will assess the proposed water supply option for the project’s construction phase and its ancillary facilities (e.g., offsite batching plant). The study will evaluate whether increased abstraction attributed to the project has the potential to impact third parties' access to water. If potential impacts are identified, the borrower will implement appropriate mitigation measures in addition to meeting any permit conditions before water abstraction as part of the project ESMS (ESAP#1). Water usage will be negligible during project operations.
The project is expected to generate minor pollution to air, water, and soil, and volumes of waste which are anticipated to be readily mitigated through the implementation of standard pollution prevention and control measures defined within the project ESMS. The project will establish a concrete batch plant to provide concrete for the turbine foundations. A pollution prevention plan, including a batch plant control sub-plan addressing air emissions and liquid effluents, erosion, and plant decommissioning, will be developed and implemented within the project ESMS (ESAP#1).
Noise, and shadow flicker impact assessments were conducted as part of the project’s ESIA. Noise from construction activities is not expected to be a significant issue for this project, as there are no residential receptors within 540 m of a turbine location, and construction activities will be limited to daylight hours. Noise modeling shows operational noise levels will remain within Ukrainian and WBG noise thresholds at the nearest sensitive receptors. Noise will be monitored during project operations. If the monitoring identifies elevated noise levels at sensitive receptors above the noise thresholds, the borrower will design and implement adequate mitigation measures.
The borrower completed a shadow flicker assessment, which identified exceedances of the WBG Guidelines threshold limits of 30 mins/day or 30 days/year (worst case), which could be expected at nearby settlements; the number of residential receptors potentially impacted was not quantified by the assessment. As per ESAP#10, the borrower will conduct a supplemental study to determine residential properties potentially affected by flickering effects above the WBG guideline thresholds. The assessment will quantify the number of households likely to be affected, considering local topography, vegetation cover, and turbine specifications. It will include an assessment of prevention and mitigation alternatives (including curtailment), the content and outcomes of consultations with potentially impacted residents, and proposed monitoring measures.
PS 4 - Community Health, Safety, and Security
Risks and impacts to host communities of the project and the public were assessed during the ESIA process. Based on the findings, as per ESAP#1, the borrower will define appropriate mitigation measures within its project ESMS and require and monitor their implementation by its contractors and sub-contractors.
The main road traffic risk associated with the project is related to the transport of the turbines, blades, and wind tower components (abnormal loads) to the site from Poland. Additional risks relate to the transport of aggregate, concrete, water, and site workers. The assessment of these risks is being assessed within the finalized ESIA. Based on the ESIA conclusions, the borrower will develop and implement a traffic and transport management plan (TTMP) that is aligned with national requirements, IFC PS4, and GIIP, and that is applicable to all contractors and sub-contractors. The TTMP will include appropriate control measures to address risks posed to road users and communities related to construction traffic, abnormal loads, and any road upgrade work required to be executed due to the project. As part of the development of the TTMP, the borrower will conduct a route survey of the local road network to assess existing road conditions and determine if specific control measures are required (ESAP#11).
No households are resident within the safety buffer zone around each turbine (defined as 1.5 times the length of the WTG blade [tower, plus rotor radius], approximately 302 m) or the overhead line, and no communities live within the project site. During operations, agricultural activities will continue between the WTGs. However, during winter, when snow and ice throw could occur, particular care will need to be taken. Appropriate mitigation measures will be defined within the OESMP, in line with the relevant EHS Guidelines, including installing warning signs and active engagement to inform local people of the dangers posed by the project.
The borrower's main contractors will engage security personnel to provide unarmed security personnel during the construction and operational phases of the project. The number of security personnel required to be engaged is yet to be determined. The borrower will ensure that the security contractors' personnel are appropriately screened, trained, and competent for their scope of work. As part of the project ESMS (ESAP#1), the borrower will develop and implement a community, health, safety, and security management plan aligned with IFC PS4, which will be applicable to the borrower and its contractors (and their subcontractors).
PS5 - Land Acquisition and Involuntary Resettlement
Securing land rights for the project commenced in 2019, led by the developer, aligned with Ukrainian legislation, and is currently ongoing. PS5 is applicable as the Ukrainian legal framework provides the possibility for the government to compulsorily acquire land for energy projects in the case amicable negotiations undertaken by the borrower fail.
No physical displacement will result from project activities. The closest residential property to a WTG is approximately 540 m. Land within the project site is currently used for crop agriculture. Land required for the project is either owned by the borrower or secured for 29, 45, 47, or 49 years via voluntary lease or easement agreements concluded with public and private landowners following amicable individual negotiations. Risks due to economic displacement are expected to be low given that the lease and easement contracts stipulate that the affected landowners are entitled to continue cultivating the land, except where the permanent infrastructure is located, without obligation to pay any compensation to the borrower. Compensation for land is calculated based on market values. Economic displacement of informal users cultivating crops on public lands will be confirmed (see ESAP#12).
The ongoing acquisition process can be described as follows: the project acquired or is in the process of acquiring land rights to an expected 444 land plots based on ownership, lease, and easement agreements concluded with public and private landowners following amicable individual negotiations. Of these, 18 plots were fully acquired by the borrower from private owners, 324 are privately owned, and 87 are publicly owned. The land tenure of 15 land plots was unknown at the time of IFC’s review. Ancillary infrastructure is expected to affect 258 land plots, of which eight plots are owned by the borrower, 199 plots are privately owned, 41 are publicly owned, and the ownership of ten plots is yet to be confirmed due to ongoing negotiations. The OHL will traverse 117 land plots, of which three plots are publicly owned by the village council, and 114 plots are privately owned. No easement restrictions are currently foreseen in relation to the OHL right of way as all identified land plots are agriculturally zoned; hence the building of residential and commercial structures is already restricted in these plots, and agricultural activities can continue. In some instances, rights to entire land plots were acquired rather than to the portion needed for project construction and operation. The project also holds a right to use additional 90 plots, which will not be affected based on the current project design.
While the available EIA, E&S Red Flag report and ESIA cover risks and impacts associated with economic displacement, it was determined that a supplementary assessment would be needed against PS5 requirements. Therefore, as per ESAP#12, the borrower will engage a competent professional to conduct a supplementary assessment of the land rights acquisition process and outcomes against PS5 requirements. This assessment report will refine the available socio-economic baseline data, include a discussion on the roles and responsibilities of the various stakeholders in the land acquisition process, contain an analysis of any grievances received, include a gap analysis of the applicable national legal requirements with respect to PS5 and outline the measures to be implemented to fill gaps if any.
A Land Acquisition, Involuntary Resettlement and Livelihoods Restoration Plan has been developed by the borrower. The supplementary assessment completed as per ESAP#12 will inform an update of this plan to bring it in line with PS5 by identifying mitigation measures to be implemented by the borrower to address potential and current impacts on land and livelihoods. As per ESAP#13, the borrower will update, implement and monitor the Land Acquisition, Involuntary Resettlement Livelihood Restoration Plan in line with PS5 requirements with the support of competent resettlement professionals.
Three years after the completion of LRP activities, the borrower will engage a third-party consultant to undertake a completion audit. The audit will include a review of the LRP mitigation measures implemented by the borrower, a comparison of implementation outcomes against agreed objectives, and a conclusion as to whether livelihoods have been restored to pre-project levels or better or whether supplemental action is required (ESAP#14).
PS 6 – Biodiversity Conservation and Sustainable Management of Living Natural Resources
The project is situated in the Central European mixed forests ecoregion of the temperate broadleaf and mixed forests biome. The wind farm site, and its associated OHL are located in a heavily human-modified landscape, dominated by crop agriculture, and project infrastructure is sited within Modified Habitat, per the IFC definition. Neither the wind farm nor its associated OHL overlap Key Biodiversity Areas (KBA) or Legally Protected Areas (LPA), nor do they have significant potential to adversely impact the biodiversity values in any such areas, with the nearest KBA being the Middle Bug River Important Bird Area, roughly 10 km east of the wind farm area, and the nearest LPA including seven small forest and/or wetland reserves within 10 km of the wind turbine area.
After conducting an initial year of bird and bat field surveys at the site, the project initiated a formal bird and bat baseline study aligned with GIIP methodology and effort levels in spring 2024 and will continue the bird baseline study by completing a full autumn season of baseline surveys, aligned with GIIP methodology matching the spring 2024 effort. In addition, the borrower will conduct vantage point surveys along the planned OHL route, mirroring the spring 2024 survey effort. The borrower will also continue the current static acoustic monitoring survey effort for bats initiated in April 2024. Acoustic data will be analyzed and reported following industry standard procedures.
Based on field surveys and risk assessments conducted for the project, to date, no bird or bat species with elevated national or international Red List status are likely to experience substantial impacts due to the project. However, some fatalities due to bird and bat collisions are expected during operation of the wind farm, and these impacts may affect some sensitive species, including bats (all bat species are protected species under EU Habitats Directive Annex II), eagles and other raptors, cranes, storks, and others. Although the project is located in Modified Habitat for its terrestrial environment, IFC Natural Habitat No Net Loss (NNL) requirements will apply to the biodiversity values using the air space (birds and bats) that are susceptible to collision impacts with turbines and OHL.
To address these impacts for bats, the borrower has committed to implement cut-in speed curtailment for the life of the project. Initially, this regime will entail the curtailment of all turbine operations when wind speed is below 6 m/s between July 15 and September 1, from 30 minutes before sunset to 30 minutes after sunrise, subject to adjustment through adaptive management. Furthermore, to ensure that the project does not exceed NNL for any sensitive bird or bat receptors, the borrower will develop an operations-phase Biodiversity Management Plan (BMP), aligned with GIIP. This BMP will include two key elements, aligned with the guidance published in the IFC-EBRD-KfW Post-Construction Fatality Monitoring (PCFM) Good Practice Handbook (2023), as follows: i) a PCFM plan intended to characterize the species composition, seasonal and spatial patterning of bird and bat collision fatalities, as well as estimation of bias-corrected overall collision fatality rates for birds and bats resulting from the operation of the wind turbines; and ii) an adaptive management protocol that articulates a commitment, and provides a science-based mechanism for triggering the implementation of additional collision impact mitigation measures if fatality rates are found (via PCFM results) to exceed “sustainable” (equivalent to NNL) levels during project operation (ESAP#15).
Although the project’s associated OHL does not pass through or near any KBA or LPA, it does cross the floodplains of the Studyanka River, and a tributary of the Zahidny Bug River, as well as agricultural fields, all of which may host seasonal concentrations of bird species prone to collisions with OHL, including cranes, waterfowl, and others. Should the 2024 autumn survey data demonstrate a high collision risk, the borrower will install bird flight diverters (BFD) along the entire length of the overhead or “static” wires of this OHL interconnection segment, following GIIP for the BFD model and spacing interval.
