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
Policy. The Group and its subsidiaries, including EQTL AL and EQTL GO, are bound by a set of overarching ESHS Group policies whose aim is to reaffirm the Group's commitment to sustainable development and generate positive impact for the environment, the market, and people. Policies include the Code of Ethics (CoE), the antibribery policy, water resources policy, waste policy, risk management policy, sustainability policy, stakeholder engagement policy, diversity and inclusion policy, environmental policy, and occupational safety policy, and are found in line with IFC PS1. As part of the ESAP, the Company will need to develop a Human Resources (HR) Policy providing the guidelines to the processes followed by EQTL AL to manage HR issues and upgrade the Stakeholder Relationship Policy, as described in the relevant sections. These enhancements will apply to EQTL GO.
Environmental and Social Management Systems. EQTL AL and EQTL GO’s operations are undertaken in line with the Corporate Environmental Management System, structured to meet the requirements of ISO 14001, including norms and procedures shared by all subsidiaries. In terms of Occupational Health and Safety (OHS) Management, in 2022 the Group assessed the compliance level of four of its distributors, including EQTL AL, based on the requirements of ISO 45001 with the assistance of Deloitte, to understand the maturity level of the Distribution Companies (DisCos) OHS management systems for a future certification. In 2023, The Group hired another external consultancy firm (PRODEG) to support the ISO 45001:2018 certification process in all its subsidiaries. EQTL AL and GO implement all projects and activities in line with the Environmental, Health and Safety (EHS) corporate directives, through the implementation of management programs aligned with the Brazilian legislation requirements and generally in line with IFC PS1. As part of ESAP item #1, EQTL AL will develop and integrate a social management system into their ESMS in line with PS1, including consideration of the following: (i) development of operating procedures to identify and address social risks of all their operations that also meet PS1 and PS7 besides local regulations; (ii) adequate assessment of project's area of influence in line with PS1 and based on identified risk and impacts; (iii) development of the required social management plans and procedures (e.g., Stakeholder Management Plan) as part of the corporate ESMS; (iv) measures to ensure adequate capacity detailing roles, responsibilities, and accountabilities. This ESAP item will include the development and implementation of a process to periodically identify and evaluate risks and impacts for indigenous and quilombola communities whose buffer zones intercept the areas of intervention of the Alagoas Loan, if any. If risks and impacts to these communities are identified, the Company will adapt and implement its SEP with a focus on participatory management of these risks and impacts, as well as making every effort to avoid, mitigate and/or compensate for the risks and detected impacts in line with IFC PS7. In addition, an Anti-Harassment Policy and Sexual Exploitation, Abuse and Harassment (SEAH) protocol to handle SEAH cases with a survivor-centered approach will be developed as per ESAP item #10. EQTL GO will implement the same social management system for its operations.
Management Programs. The Group’s Environmental Management System includes procedures to: identify environmental risks and impacts; track legal requirements applicable to operations; manage waste, noise and air pollution; respond and prepare to emergencies; manage water resources; and undertake audits. These are applicable to EQTL AL and EQTL GO’s operations and are commensurate to the project risks and impacts, in line with IFC PS1. The Company and the Affiliate manage its occupational risks through the Risk Management Program (PGR in Portuguese), the Occupational Health Management Program (PCMSO), the Environmental Risk Prevention Program (PPRA) and other Procedural Rules (Normas de Procedimento – NP), which operationalize the Corporate OHS Policy, Risk Management Policy and the OHS Manual and Directives. The PGR includes a risk inventory and an associated action plan, and together with the PCMSO and PPRA, is considered commensurate to the risks and impacts of the Project. Social Management Procedures will be developed as per ESAP item #1. In the effort of alignment with international standards, as per ESAP item #2, EQTL AL will integrate in all its management plans a set of key performance indicators (KPIs) to monitor E&S performance, ensuring that the Company has quantitative measures that put values on its E&S performance and is able to act appropriately when needed through dedicated action plans. The same KPIs will be applied to EQTL GO’s management plans.
Identification of Risks and Impacts. All Group’s subsidiaries have an Environmental Aspects and Impact Assessment procedure to assess, measure and mitigate the Environmental impacts arising from their activities. Identified environmental and social risks from all the processes, activities and facilities are registered in an Environmental Aspects and Impacts Matrix, which details the type of risk or impact for each activity and an assessment of importance, magnitude and probability of occurrence. The E&S impacts of new projects are identified through impact assessments aligned with the Brazilian legislation, as detailed in the Licensing Procedure (NP- Licenciamento e Autorizações Ambientais de Empreendimentos). Unless a project is explicitly of government interest (federal, state, or municipal), sensitive or legally protected areas, such as conservation units, archeological sites, indigenous lands, and/or lands of traditional peoples (mentioned in the procedure as “sensitive areas”), must be strictly avoided. The procedure also includes requirements to undertake analysis of alternatives and to select the least impactful one in terms of E&S. The Group implements another specific procedure in case a project requires to be developed in a sensitive area (NP Interferência em Áreas Sensíveis), that details the environmental licensing process for projects in such areas. The Company proposes the project including a justification of the impracticability of other solutions (e.g., the need to provide electricity to an IP community located within an IP land). The screening process includes overlapping the projects to the GIS information provided by the relevant authorities (including the Federal Environmental Authority, National IP Foundation, Chico Mendes Institute for Biodiversity Conservation, National Historic and Artistic Heritage Institute, National Institute for Colonization and Agrarian Reform) and implement the national legislation requirements, including the need for engagement with the authority managing the sensitive area (i.e., IPs and relevant authorities, conservation unit management authority, or similar). For the Project, no CAPEX items funded by IFC are or will be undertaken in Alliance for Zero Extinction Sites or World Heritage Sites, and no risks and impacts have been identified that would affect IP lands. As per ESAP item #3, EQTL AL will upgrade its identification of risks and impacts procedures to align them with IFC PS6 to define mitigation measures commensurate to the risk of the Alagoas Loan. EQTL AL will develop a Biodiversity Screening Procedure (including mapping) to properly assess biodiversity impacts, including baseline requirements, risk assessment in line with PS6, and management and monitoring aspects of any future activity to understand: (i) that all projects comply with Brazilian regulatory requirements; and (ii) what the needed management and monitoring requirements aligned with PS6 will be applicable depending on the type of habitat where these will be developed (Modified, Natural or Critical Habitat), and priority areas for risks related to wildlife collision and electrocution. The procedure will also define when to conduct a feasibility study on “wildlife friendly” pole/line design with the support of qualified experts. ESAP item #1 will cover needed upgrades in line with PS7. The same Biodiversity Screening Procedure will be implemented in Goias.
Organizational Capacity and Competency. The Group is in the process of changing its structure related to the areas of Environment, Social Responsibility, and Occupational Safety, establishing a superintendence directly linked to the Group’s CEO, along with respective management units. EQTL AL’s management of E&S aspects is currently in the hands of the Environmental, Social Responsibility, Legal and HR managers located in the corporate offices in the State of Maranhão, who coordinate the activities of executives and coordinators at the State level. Only one OHS coordinator is currently part of EQTL AL on-site staff, while the rest of the E&S staff assists from the corporate office. Contractors are requested to have EHS supervisors when activities are being undertaken, and contracted companies carry out the necessary E&S impact assessments and EHS performance evaluation of activities. The current E&S staffing needs to be enhanced to manage all E&S aspects of the Alagoas Loan. EQTL AL is working in improving the capacity of the team, as part of a workforce insourcing process. As part of ESAP item #4, EQTL AL will define an enhanced org-chart of its own operations to respond to the Group’s structure modification and the ongoing insourcing process, defining reporting lines with the corporate management units, the job description of all staff involved in the management of E&S aspects (both in EQTL AL and in the corporate offices) and proving adequate capacity in line with IFC PS1. The same organizational structure will be duplicated to cover the EQTL GO concession.
Contractor E&S Management. EQTL AL and EQTL GO employ contractors for network maintenance and construction, technical and commercial services, right of way maintenance, operational emergency response, substation maintenance and ‘Luz Para Todos’ program (government program providing access to energy to the rural population). At the time of the site visits, 38 third-party companies that provided outsourced services to EQTL AL, and XX to EQTL GO. All contractors need to go through a third-party review of their labor, OHS and other legal documents. Service suppliers receive the Supplier Code of Ethics (CoE) and must follow all contractual clauses, which set minimum compliance requirements and warn of contract termination in case of non-compliance with fundamental clauses (e.g., involvement in child and forced-labor practices and environmental legal requirements). Suppliers are also bonded to operate in accordance with the Group's CoE and corporate policies. The performance of contractors is monitored through the Supplier Performance Index, through which all Group’s subsidiaries, with the assistance of the corporate office, evaluates the service provider based on four pillars detailed in the Sustainability Book: (i) Strategic E&S Vision; (ii) E&S Management and Governance; (iii) Social; and (iv) Environmental. Before the start of any activity, EQTL AL and EQTL GO’s safety technicians present on-site the risks of the activities to be carried out, the respective control measures and verifies the legal and safe conditions of vehicles, accommodations (as needed), materials, and equipment. In addition, all Group’s subsidiaries establish a safety inspection schedule through the Planning, Scheduling, and Control of Routes Procedure, as well as safety blitzes at work fronts. In order to further align EQTL AL’s practices with IFC PS, the Company will consolidate all information about contractors’ management in a specific Contractor Management Plan, to include contractor’s requirements during the bidding and contracting process, implementation specifications to operationalize the Supplier CoE, the OHS Manual and other documents during project implementation, detailing roles and responsibilities, training requirements, E&S monitoring requirements (including those of IFC and EBRD’ guidance note Workers' Accommodation: Processes and Standards), management of non-conformities, forms/tools used during monitoring of contractors’ performance and KPIs (ESAP item #5). The same Contractor Management Plan will be applied to EQTL GO.
Monitoring and Review. EQTL AL and EQTL GO have procedures to monitor all EHS management programs as well as compliance with legal obligations and regulatory requirements. The Company and the Affiliate have processes to evaluate the safety, environmental, and quality performance of all the work crews (employees and contractors). Field inspection programs are in place to assess the integrity of safety procedures, quality of execution and compliance with labor legal requirements. Through the development of KPIs for all management procedures as per ESAP Item #2, EQTL AL and EQTL GO will add a key tool to ensure that their ESMS’s are properly aligned with the ‘plan-do-check-act’ cycle for continuous improvement.
The Company and the Affiliate rely on corporate goals and indicators as measurement instruments, essential to ensure the full compliance with socio-environmental policies and objectives established by the Group. The goals encompass indicators related to occupational safety, diversity and inclusion in entry programs, corporate reputation, ESG ratings, and the reduction of SF6 gas emissions, as well as alignment with the UN Sustainable Development Goals. Directors, superintendents, and managers also have ESG goals on their scorecards, derived from the CEO's goal. The goals are monitored monthly. The Group has adopted the standards of the Global Reporting Initiative (GRI) and SASB (Sustainability Accounting Standards Board) and publishes annual sustainability reports.
Emergency Preparedness and Response. EQTL AL and EQTL GO have an Emergency Action Plans (EAP) for each of its assets, and an EAP is requested to each contractor undertaking activities for both Group’s subsidiaries. In addition, a Crisis and Communication Manual has been prepared by the Group, presenting a methodology to ensure a quick response to crisis situations (defined as “any situation that threatens or has the potential to threaten the integrity of people or properties, significantly disrupt a business, tarnish reputations, or negatively impact market value”) while guaranteeing a coordinated and appropriate flow of information to its various stakeholders, both during and after the event. In response to increased climate-related events, the EQTL AL will ensure that the EAP incorporates extreme weather events among the risks for its operations. In addition, the client will integrate preventive measures for workers during climate-related events, such as heatwaves, drought conditions, wildfires and flooding into the existing procedure, to comprehensively cover climate risks, ensuring a holistic approach to worker safety and corporate resilience (ESAP Item #6). The same provisions will be included in EQTL GO’s EAP.
PS2: Labor and Working Conditions
HR Policy/Procedures, Working Conditions and Terms of Employment. As of December 2023, EQTL AL had 503 direct employees, 25% being women, and 3,387 contractor workers. The company is going through a workforce insourcing process in which it plans to hire 765 people who currently work as outsourced workers. In September 2025, Equatorial Goiás employed 2,080 direct staff (20% women) and 10,492 outsourced contractor employees. The Group’s CoE includes respect for diversity and a commitment to zero tolerance to the practice of work that may be considered degrading, forced, slave, child labor, abuse or sexual exploitation of children and adolescents, human trafficking, in its activities or in its value chain. In case of non-compliance with the Code, a complaint can be made through the Ombudsman Channel, which is outsourced and available to all employees, community, suppliers, and business partners and assures anonymity. As per ESAP Item #7, EQTL AL will develop a Human Resources Policy, in line with IFC PS2, providing the outline of the organizational approach to managing its workforce with specific guidance on various employment-related matters, articulating the organization's intent on aspects of Human Resource management such as recruitment, promotion, compensation, and training. The Human Resources Policy will apply to EQTL GO.
EQTL AL and EQTL GO do not employ anyone under the age of 16 in its operations (except for minor apprenticeships, a special program of the Brazilian Government) and do not employ anyone under the age of 18 in night, dangerous or unhealthy work. Employees are provided with contracts describing labor and working conditions, and through the induction program are informed of the corporate policies and the CoE. Overall good labor management practices were observed at appraisal. In general, working conditions comply with local legislation and the terms are negotiated with the Labor Union. The Company and the Affiliate guarantee freedom of association and non-retaliation for union meetings, participation, or negotiations. As per ESAP Item #7, EQTL AL will develop, implement, and integrate into its management system a training program for employees and contractors on its CoE and the policies, procedures and practices of non-discrimination, gender equality and prevention of GBV, stakeholder engagement, internal and external complaints mechanism, with special attention to employees and third parties who have direct contact with affected communities or customers. The same will apply to EQTL GO.
Non-discrimination and Equal Opportunity and Worker’s Grievance Mechanism. The Group has a Diversity and Inclusion Policy that establishes definitions, attributions, prohibitions, and a reporting channel on the topic. The People and Management area established, in 2022, for gateway programs, such as the Young Apprentice Program and the Internship and Trainee Programs, the target of hiring 50% of self-declared black, female or LGBTQIAP+ people. As per ESAP Item #7, EQTL AL will improve the HR procedures, in line with IFS PSs, to: (i) make explicit statements to ensure non-discrimination, equal opportunity and fair treatment during recruitment and selection; (ii) operationalize the CoE and the Diversity and Inclusion Policy, including action strategies and guidelines, awareness and training program, and improving the quality and monitoring of KPIs; (iii) improve its practices to promote gender equality, through campaigns, goal setting and mechanisms for monitoring risks associated with GBV; and (iv) publicize the internal complaints mechanism, ensuring coverage for its own employees and outsourced workers. EQTL GO will implement the same HR Procedures.
The Group has an independent complaints channel, operated by a specialized third-party company, which guarantees the anonymity and confidentiality of information. Complaints can be made 24-7 by email, on 0800 721 0730 or via website. The channel is available to the Group employees and service providers and is publicized in communication actions with employees and third parties, as well as on the Group's own intranet. The Company has an Internal Audit area, responsible for receiving, analyzing, and investigating complaints and reports from its own employees and third parties. The Audit team and the outsourced company responsible for the Ombudsman receive training on receiving, investigating, and handling cases of sexual harassment. The process is deemed aligned with the IFC PS and effective in managing external grievances.
Occupational Health and Safety. The Corporate Occupational Safety Management Department structures, plans and implement levels of protection based on government regulations and best practice for the activities carried out by DisCos, including EQTL AL and EQTL GO. The Audit and Internal Controls Department is responsible for auditing processes related to occupational safety, occupational medicine, training, internal regulations, buildings, fleets, supply, and operations. based on Brazilian legislation and ISO 45001. In 2023, the Group also hired an external consultant (PRODEG) to assist in obtaining ISO 45001 certification and to audit contractors. EQTL AL and EQTL GO manage their occupational risks through the Risk Management Program (PGR in Portuguese) and other NPs, which operationalize the Corporate OHS Policy, Risk Management Policy and the OHS Manual and Directives. The PGR includes a risk inventory and an associated action plan. The Corporate Health and Safety Committee ensures legal compliance, efficiency in health and safety, and accident prevention. In 2022, the Committee held monthly meetings with EQTL AL top management and OHS department. Recommendations are forwarded to the relevant departments with action plans and compliance deadlines for continuous improvement. Supplier companies undergo inspections and audits. Performance is measured by a Safety Management Performance Level system. The result is a weighted average of the sum of the accident frequency rate, accident severity rate, audits, crew inspections, dormitory inspections (as needed), and senior leadership participation in safety workshops. The Group has established procedures to record, classify and process accidents and incidents (near misses). EQTL AL operations have lost time injury frequency rate (LTIFR) of 1 (per 200,000 hours) in 2023, which is slightly above international benchmarks (0.7, according to the Bureau of Labor Statistics for Electric power transmission, control, and distribution, see bls.gov). As part of ESAP item #5 – Contractor Management Plan, EQTL AL will reinforce management, supervision and training for its contractors, as the majority of LTIs (97%) involve contractors.
EQTL GO operations reported an LTIFR of 0.5 for 2025, demonstrating performance that aligns favorably with international standards.
PS3 – Resource Efficiency and Pollution Prevention
The Environmental Management System of the Group encompasses procedures for identifying risks, tracking legal requirements, managing waste, pollution, emergencies, water resources, and conducting audits. In EQTL AL and EQTL GO, water is sourced from the public urban supply network and primarily consumed at the administration building. As a way to mitigate the risk of water shortage, EQTL AL and EQTL GO use rainwater in substations. Waste and wastewater management is undertaken in line with local legislation and IFC PS. Noise and air-emission (mainly dust) management procedures are in place and aligned with good practice and IFC PS. Temporary storage of hazardous substances was evaluated while visiting the substations and central warehouse of both EQTL AL and EQTL GO. Management procedures at Alagoas were found in alignment with Good Industry Practice. At the Technical Center in Goiánia—where transformers undergo major maintenance—upgrades are needed for the facility to comply with WBG EHS Guidelines. These improvements will be implemented by EQTL GO in accordance with ESAP Item #11.
Currently, there are no records of equipment contaminated with PCB in EQTL AL or EQTL GO. Nevertheless, the Company and the Affiliate are working on conducting an inventory of PCBs in its equipment base, in compliance with the legislation (i.e., PCB-containing materials and equipment must be purified or disposed of by 2028). No herbicides are used to control vegetation.
The Group quantified greenhouse gas emissions (GHG) using internationally recognized methodologies resulting in 1,776,215 ton CO2-eq for Scope 1, 2 and 3 in 2022 and 1,622,911 in 2025. Emissions are primarily due to land use change, vehicle and equipment fuel, sulfur hexafluoride (SF6) fugitive emissions, energy consumption in offices and substations and electricity distribution losses. The Group has several energy efficiency initiatives, such as initiatives to reduce distribution losses, and circular economy initiatives, among others. To further enhance the GHG management, EQTL AL will develop as part of ESAP item #8 an SF6 Management Plan to provide framework guidance on SF6 management, monitoring and reporting according to industry best practices to prevent and minimize risks and impacts. The same will be implemented at EQTL GO.
PS 4 – Community Health, Safety, and Security
Hazards associated with accidental contact and manipulating electrical is one of the main risks and operational impacts of DisCos. EQTL AL and EQTL GO diligently conduct extensive campaigns and initiatives to promote safe electricity use, aiming to reduce associated risks. Through lectures, interactions, printed materials, and social media posts, the Company and the Affiliate informs communities about dangers, protective measures, and emergency channels, with teams being trained to act accordingly.
EQTL AL and EQTL GO favor recruitment and hiring of local employees to reduce the transportation requirements and the need for migrant workers. Transportation risks are managed through a specific section of the OHS Manual on vehicles and transportation equipment, valid for direct and indirect employees, and aligned with IFC PS4.
EQTL AL has a Property Security department that is responsible for the reception, concierge, surveillance, and patrol processes. Teams are all outsourced, except for two own analysts. The Group has an Operational Instruction on the Progressive Use of Force which covers responsibilities, techniques, tactics, and basic principles for the progressive use of force, applicable to all subsidiaries. The Company has 14 armed surveillance posts, manned by 34 professionals, working 12 or 24 hour shifts, depending on the location. There is remote monitoring by cameras in some substations. Training for security teams is provided by the outsourced company itself, which is legally qualified. As per ESAP item #9, the Company will develop a Security Forces Management Plan for managing private security forces to avoid potential harm to employees, communities, and other stakeholders. This plan should include formal procedures for reporting, responding to and documenting security incidents, training requirements including GBV prevention and management, and reviewing of security record of security contractors, consistent with IFC PS4.
EQTL GO has implemented electronic security systems (including CCTV, artificial intelligence analysis of images activating alarms and response, and speakers connected to the security control center to dissuade intruders) associated with security patrol units strategically covering most of their substations. The Security Forces Management Plan developed under ESAP item #9 will be tailored to Goias and implemented by the Affiliate.
