IFC’s appraisal considered the environmental and social management planning process and documentation for the Project and gaps, if any, between these and IFC’s requirements. Where necessary, corrective measures, intended to close these gaps within a reasonable period of time, are summarized in the paragraphs that follow and (if applicable) in an agreed Environmental and Social Action Plan (ESAP). Through implementation of these measures, the Project is expected to be designed and operated in accordance with Performance Standards objectives.
PS1: Assessment and Management of Environmental and Social Risks and Impacts
E&S Policies and Management Systems: EDF Power Solutions has developed an Environmental and Social policy that is applied to its projects worldwide. In addition, for this project an overarching environmental and social policy will be established by the project company [ESAP#1]. The policy will specify that the project will comply with applicable laws and regulations and will be aligned with IFC Performance Standard 1 requirements. The policy will indicate who, within the client’s organization, will ensure conformance with the policy and be responsible for its execution.
The company will establish an Environmental and Social Management System (ESMS) [ESAP#2] that will (i) incorporate an E&S Policy; (ii) combine all mitigation, monitoring, and management measures from the EIS, S-ESIA, and the ESAP requirements, to be used throughout the Project’s life; (iii) outline the schedule, resources, and performance indicators; and (iv) define responsibilities, including organizational structure, roles, communication, and reporting needed to implement the ESMSs.
The ESMS will include a Contractor Construction E&S Management Plan (ESMP), an Operations ESMP , and a range of detailed sub-plans covering areas such as labor management, occupational health and safety (OHS), emergency response, environmental controls, cultural heritage, and security. These components support comprehensive implementation and monitoring of environmental and social requirements throughout the project.
Based on the conducted surveys and assessment there is no direct impact on known cultural, historical, or archaeological resources within the project footprint. The assessment identified three culturally significant springs nearby that are valued by the community. To protect these springs, the construction ESMP will require clear instructions to workers, induction briefings, and site signage to prevent disturbance. Additionally, a Chance Find Procedure will be developed as part of the ESMS [ESAP#2] and implemented.
Identification of risks and impacts: For the Timor Solar development an Environmental Impact Statement (EIS) was prepared in compliance with applicable national standards and E&S regulatory permits and requirements. The gaps were identified in the EIS by the project sponsors and an external consultant was contracted in 2025 to undertake a Supplementary ESIA (S-ESIA) to conduct EIS gap analysis, supplement the EIS, and address identified gaps in line with IFC Performance Standards requirements. The S-ESIA was prepared by an external consultant per the EIS gap analysis and will be revised based on additional feedback [ESAP #3].
Organizational Capacity: EDF Power Solutions has a dedicated corporate E&S team and its E&S experts are involved in the project development. The requirements for the EPC Health and Safety Manager will be included in the EPC contract. At the project company level, a Project Environmental, Health and Safety (EHS) team is not yet formed. In accordance with the ESAP#4, an EHS Manager will be appointed at the SPV level, who will be responsible for overall project’s E&S performance.
Monitoring and Review: In accordance with the ESAP#2 EHS monitoring requirements will be included in the ESMS for the construction and the operation phases of the project. The E&S staff contracted by the EPC contractor/O&M provider will be responsible for the implementation of the ESMPs, including contractors’ developed management plans and programs, monitoring actions and reporting. The company’s EHS Manager recruited as per the ESAP#4 will monitor the project E&S performance as per the ESMS.
Emergency preparedness and response: The project site may be exposed to a range of potential emergencies, including fires or thermal runaway within the BESS, inverter or substation fires, flooding and flash floods, erosion, landslides, and seismic events, as well as cyclones and severe storms. Additional risks include external wildfires, and hazardous material releases. Under climate change the primary concerns are flooding and precipitation increases, as well as potential landslides in surrounding hills and changes in solar irradiance patterns. The S-ESIA will be amended [ESAP#3] to include site-specific quantitative modeling of flood and compound risks, and define any required adaptation actions. The company will develop an emergency preparedness and response plan (EPRP) as part of the ESMS [ESAP#2].
For emergency scenarios involving BESS-related fires and explosions, the emergency response procedure, including any actions concerning nearby communities, will be informed by the BESS HAZOP as well as Layers of Protection Analysis (LOPA) and consequence modelling that covers fire, explosion and other hazardous event scenarios which will be conducted during the detailed design phase. Based on the outcomes of the HAZOP and LOPA, a decision will be made on whether a Quantitative Risk Assessment (QRA) is required to further evaluate and quantify potential risks. As relevant, the QRA will also inform additional emergency response measures tailored to the limited emergency response capacity in Timor-Leste.
The S-ESIA identifies climate change risk and the site is rated as medium risk for future climate hazards based on the S-ESIA climate risk modeling. The OHS plan and the EPRP [developed as part of ESAP#2] will be required to address climate-related hazards such as flooding and extreme heat. IFC’s review identified a low level of project residual E&S risks and impacts resulting from a changing climate. The client will manage and mitigate risks and potential adverse impacts by implementing relevant measures identified in the assessment as included in the ESAP. The client will monitor and report on their implementation.
Supply chain: The company will not directly procure PV panels or BESSs and CMEC will be responsible for its procurement under the EPC contract. EDF has publicly committed to prohibiting forced labor, child labor, and addressing significant safety issues, as outlined in its corporate social responsibility statements. EDF Power Solutions has established a procurement policy applicable to all entities, which mandates the inclusion of E&S clauses in industrial procurement contracts. These clauses require suppliers and contractors to comply with EDFps’ E&S standards and to extend these requirements throughout their supply chains. Accordingly, the EPC contract for the Project will specifically include relevant clauses on the solar supply chain to ensure that no forced labor will be used in the supply chain for the Project. The project company will develop and implement a Supply Chain Management System [as per ESAP#5] aligned with EDFps as well as IFC E&S requirements.
PS2: Labor and Working Conditions
Human Resources: The SPV will develop HR policies and procedures that meet the requirements of EDF and Itochu, regulatory labor requirements of Timor-Leste, as well as IFC’s PS2 [ESAP#6a]. The policy part will include, among others, a commitment to providing workers with documented information regarding their rights, freedom of association, non-discrimination, fair treatment of migrant workers, proper management of worker accommodation, non-discrimination and equal opportunity, workers grievance mechanism and workplace gender-based violence and harassment, avoidance of child or forced labor, management of workers employed by third parties/contractors, and proper management of worker health and safety.
Terms and conditions of employment: SPV will develop an employment contract template which adheres to local labor law [ESAP# 6b]. Employment contract defines the key employment terms and conditions including the job description, duration of employment, working hours, salary and allowances, leave entitlements, welfare and social responsibility, probation and notice periods, provision of trainings. The employment contract template once developed will be used by EPC to guide the development of employment contracts for the construction workforce, including the workforce from subcontractors, as well as daily workers [ESAP# 6c].
Freedom of Association (FoA): The Labor Code of Timor-Leste (Law No. 4/2012) governs labor relations, including the establishment and operation of trade unions in accordance with legal procedures. The law provides the legal basis for workers to form unions, engage in collective bargaining, and participate in strikes. As its policy on FoA, the SPV will obey the law and will not restrict employee freedom of association and will respect their representativeness of workers in disputes, grievances, and negotiations with employers.
Worker’s grievance mechanism: A grievance mechanism will be built into SPV’s E&S management practices [ESAP #7]; issues can be escalated to higher levels within the organization as and when needed. This will incorporate a worker/contractor grievance mechanism to allow free flow of grievances from contracted workers and staff to the relevant line managers for a mutually acceptable resolution. The grievance mechanism will include provisions for anonymous complaints, confidentiality protection and non retribution. The construction contractors will be held responsible for the fair and appropriate handling of contractor’s worker grievances, and this will be subject to monitoring by SPV.
Workforce management: SPV will have a team of around 10 staff. There are estimated to be up to 400 workers at the peak of construction. During operation, a total of 20 staff is expected. The EPC contractor will have an HR policy and procedures applicable to its employees. Pursuant to the Contractor Labor Management Plan mentioned above in PS1 [as part of ESAP#2], SPV will review the EPC contractor's HR policies and procedures to verify that they meet the project requirements. SPV will work closely with the EPC contractor to promote local access to project employment in the construction phases of the project. Top priority in hiring will be given to those members of local communities affected by project development. It is expected that more than 50% of its construction workforce will be made up of Timorese.
Protection of the workforce: The minimum age for construction work under international standards and Timor-Leste labor laws is 18 years. SPV will not make use of child or forced labor. Contractors are required to strictly follow the national labor law and hire only employees older than 18 years of age for construction work with age screening process in the recruitment. SPV’s oversight will include contractors’ minimum age compliance.
Worker accommodation: The majority of the construction workforce will come from local communities, and there is no plan to build work camps. Construction workers will commute between home and the project site. There will be a provision of transportation to facilitate daily commutes. Accommodation for other workers may need to be arranged through rental housing in a nearby town located approximately 10 kilometers from the project site. The Contractor Management Plan will include worker accommodations standard to meet the guidelines provided in “Workers' Accommodation: Processes and Standards” developed jointly by IFC/EBRD, the standard will be required if a site camp or rental local resident structures become required [as part of ESAP#2].
Occupational Health and Safety (OHS): During the project’s construction, workers may be exposed to hazards such as slips, trips, and falls; injuries from moving machinery or lifting heavy materials; electrical shocks during installation; fire or explosion risks from batteries and hot works; dust and chemical exposure; and heat stress from outdoor work. In the operational phase, main risks include electrical shocks and arc flashes during maintenance, fire or explosion hazards from BESS thermal runaway or system faults, chemical exposure from battery components, and physical risks such as falls, manual handling injuries, and extreme weather exposure. EDFps will include detailed EDFps' H&S requirements in the EPC contract with CMEC. In accordance with the document, CMEC is required to establish and maintain a robust health and safety management system, ensuring compliance with EDFps’ standards and legal requirements. This includes providing comprehensive H&S documentation (including OHS policy and procedures aiming to prevent and control OHS-related impacts), appointing qualified H&S representatives, conducting risk assessments, delivering ongoing training and communication to all personnel, and implementing effective emergency preparedness and incident reporting procedures. SPV will develop an Occupational Health and Safety Plan as part of the ESMS [ESAP#2]. EPC will be required to adopt climate-resilient safety practices consistent with PS2 (particularly in light of extreme heat, flooding and cyclones).
PS3: Resource Efficiency and Pollution Prevention
Air emissions: During construction, dust from earthworks, vehicle movement, and material handling are is expected. Once operational, air emissions will be negligible. Occasional vehicle movements for maintenance are not expected to cause measurable off-site effects.
Greenhouse gas emissions: The project will lead to a GHG emissions reduction of 107,998 tCO2e/yr by displacing diesel-fueled power generation.
Noise and vibration: Operation of heavy machinery and vehicles will cause temporary increases in ambient noise (up to approximately 90 dBA) and vibration near work sites during construction. Given the 3 km distance to the nearest settlement, impacts will be minor and localized, with negligible disturbance to communities outside the largely uninhabited project area. During operation, noise from inverters and transformers will be minimal, as the equipment will be enclosed and located far from residential areas. Noise levels are expected to comply with applicable standards (national and WBG EHS Guidelines).
Water use: Water demand for construction is estimated to average about 100 m³ per day, which will be supplied by trucks. During construction, water will be required for dust suppression, concrete mixing, and other site activities. The S-ESIA will be amended [ESAP#3] to include impacts associated with water use as well as relevant mitigation measures. Use of groundwater during construction and operations, if considered, should be preceded by a hydrogeological assessment to confirm resource sustainability and prevent potential impacts on local users. The amended S-ESIA will include assessment of use of groundwater in its next revision if the use of groundwater will be planned. During operation, water consumption will be low and limited mainly to periodic solar panel cleaning. Dry-cleaning methods are under consideration to further reduce demand.
Stormwater and surface water pollution: Construction activities may cause soil erosion, contamination, sedimentation, and accidental fuel or chemical spills, potentially affecting seasonal watercourses and nearby coastal coral reefs. The EPC contractor will manage stormwater and implement erosion controls in accordance with Good International Industry Practice (GIIP) as defined in the World Bank Group (WBG) General EHS Guidelines. Once operational, the drainage system will remain critical for managing runoff. Regular maintenance of perimeter and internal drains shall be undertaken to prevent blockages. Detailed drainage specifications, including measures to manage major storm or rain events, shall be developed and confirmed during the detailed design phase. The final detailed design shall include measures to control stormwater discharge rates and velocities, provide effective energy dissipation, and protect coastal stability in accordance with the relevant WBG EHS Guidelines [ESAP#8]. The detailed design will take into account flood flows based on the climate change scenarios and quantitative modeling of flood and compound risks, and required adaptation actions as per ESAP#3.
Waste generation and disposal: During construction, packaging waste, scrap materials, and domestic waste from workers will be generated. During operation, waste will be produced primarily as domestic and office waste, maintenance-related industrial waste, and hazardous waste including damaged or end-of-life batteries and PV panels, as well as e-waste from replacement of electrical components and liquid waste from cleaning and sanitary facilities. The company will develop a waste management plan [ESAP#2] aligned with WBG EHS guidelines and tailored to Timor-Leste’s limited capacity for hazardous waste treatment and recycling.
Hazardous materials: Construction activities may pose a potential risk of releasing petroleum-based products, such as lubricants, hydraulic fluids, or fuels, during their storage, transfer, or use in equipment. The company will develop a Hazardous Materials Management Plan, aligned with the requirements of the WBG EHS Guidelines, as part of the ESMS [ESAP#2]. The Hazardous Materials Management Plan will include flood resilience measures.
Decommissioning: E&S impacts during decommissioning are expected to mirror those of the construction phase, including temporary and localized dust, noise, increased traffic, and waste generation. Given Timor-Leste’s limited waste management infrastructure, early engagement with specialized recycling partners will be required in accordance with the ESMS [ESAP#2].
PS4: Community Health, Safety and Security
Community Health and Safety: The most significant impact of the project on the health and safety of local communities will be the increased flow of construction traffic to and from the project site where the construction activities will take place. The construction ESMP developed as part of the ESMS [ESAP#2] will include the Construction Traffic Management Plan to avoid or minimize impacts related to dust, noise, road congestion, traffic safety on local communities.
Influx: As discussed in the PS2 section, the current estimation is that the majority of construction workers will be local villagers who commute daily between the project site and their homes. The remaining small management team and expatriate personnel as well as construction workers will travel between Dili and the project site or reside in rental accommodation in a nearby town, which is approximately 10 km from the site. Given this workforce composition, and total number of workforce and construction duration, the influx impacts are not considered significant.
Security Management: The project site will be fenced before the construction starts. External security staff responsible for perimeter patrols will be outsourced from licensed private security companies, they will be unarmed. In accordance with the ESAP#2, the company will develop and implement a code of conduct that will be applicable to security personnel. It will include references to non-discrimination, sexual harassment and gender-based violence, and rules for interaction with the local population, proportionate use of force and a clear set of dos and don’ts.
PS5: Land Acquisition and Involuntary Resettlement
The project site is vacant, uninhabited, and uncultivated land under formal government ownership, subject to customary practices. While there are no permanent settlements or agricultural activities, local villagers occasionally use the area for grazing livestock, collecting firewood, tamarind and other subsistence activities. The project land acquisition did not require any physical displacement of local communities, but access to public natural resources in the project areas will be lost when construction commences.
Land Tenure: Land tenure in Timor is characterized by a combination of formal government ownership and customary practices. Most farmland and residential plots are managed by families or clans under traditional tenure systems, with boundaries recognized by local consensus and inheritance, rather than legal title. Customary land rights are generally respected within the community, and disputes are usually resolved through mediation by elders or Suco (village) leaders. The project has been granted with usership of the state-owned land with no known land disputes concerning the project land use including land acquired for the placement of overhead transmission line from the customary users.
Project-Affected People: There are two Sucos (villages) whose residents will lose access to the public natural resources of the project site. The residential area of Lifau is about 3 km east of the site, and the residential area of Haturalan is about 3.5 km east-southeast of the site. The next closest residential area is the town of Laleia. Suco Cairui, approximately 10 km south of the project site, is not expected to experience any loss of access.
The SPV will develop and implement a community development program [ESAP#9] to address these impacts, which will include: 1) Exploring resources and facilitating access for villagers to continue collecting firewood, tamarind, grazing, and other subsistence materials. Initiatives such as planting tamarind trees in areas near the residential communities are being considered as tamarind, although not native, is common and locally valued; 2) Supporting local economic development by promoting activities such as agriculture, fishing, and small-scale trading, which are primary livelihoods in these communities; 3) Prioritizing job opportunities for local community members and offering vocational training where feasible.
PS6: Biodiversity Conservation and Sustainable Management of Living Natural Resources?
The Project is located within the Timor and Wetar deciduous forests Ecoregion which is characterized by a mix of forest types, including savannah woodlands on lowland coastal areas. Endemic birds and mammal species are prevalent.
Adjacent to the project is the Lamsanak Protected Area (PA), which is an officially proposed and ungazetted terrestrial extension of a marine conservation zone that contains sensitive marine habitats, including coral reefs. Approximately 40 hectares of the Project overlaps with the buffer zone of the PA. The Project will be required to contribute to the ongoing management of the PA that will be outlined within a Biodiversity Management Plan (BMP) [ESAP #10] as part of the Project’s ESMS.
The Project area (350 ha) is located within a mosaic of natural and modified habitats, including 260 ha remnant savannah woodlands and coastal vegetation that are natural habitats, and agriculture. The Project will be required to avoid impacts on natural habitats through site level planning to construct the solar array and BESS (100 ha footprint) within modified habitats where possible. The remaining natural habitat is to be set aside within the project area and conserved. The S-ESIA will be further amended as per ESAP#3 to account for avoidance of natural habitat within the Project footprint and include a strategy to set aside remaining natural habitat values. The BMP will include management measures to conserve remnant natural habitat during construction and operation [see ESAP#10 above]. Critical habitat was not identified based on field surveys and screening of predicted species, including endemic species. The BMP will also include climate stress scenarios.
Impacts from the project relate mainly to construction phase impacts affecting nearby marine habitats from sedimentation and habitat clearing. A 300 meter transmission line is proposed, however there is unlikely to be ongoing impacts post construction. To manage these risks, the ESMS [ESAP#2] will implement erosion and sediment control measures to protect coastal and marine habitats.
The area is currently used for grazing which is an ecosystem service. Management of agricultural use is covered by IFC PS5.
