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
As per the Ukrainian environmental permitting process, national Environmental Impact Assessment (EIAs) were submitted to the Regional State Administration, Department of Ecology and Natural Resources in 2025 and were approved subject to various conditions. The company commissioned gap analyses of the national EIA reports against IFC PS. During IFC’s appraisal, additional biodiversity baseline studies and assessments were undertaken, to meet lender requirements, and measures that supplement the mitigation contained with the EIAs were identified and agreed upon in the ESAP. IFC and the company will disclose the final version of the EIAs and supplementary studies, once in-country public disclosure restrictions are lifted.
The construction and operational phase E&S management and monitoring accountabilities for all three subprojects will be shared between Elementum and its main construction and O&M contractors, which will be clearly established in their contract E&S provisions (Sustainability Annex or similar). While Elementum’s Integrated Management System (IMS) and its policies and guidelines, including those relating to Sustainability, Environment, Human Resources, Health and Safety, Land Use and Selection of Counterparties provide an overarching commitment and framework for E&S risk management, many elements of a corporate ESMS, including procedures and governance required to implement these policies, are yet to be developed. Further, the IMS focuses on office based and operational activities rather than on-site construction and operation, where most E&S risks arise, and the policies currently apply to company employees, but not to on-site contractors who will construct and operate the assets.
As per ESAP#1, Elementum will enhance its corporate policies, standards, and procedures to, amongst others, outline when and how compliance with IFC PS will be achieved, and to cover construction as well as operational activities, including those undertaken by third parties. In doing so, existing policies and standards will be expanded, and new ones developed which together will include those relating to: land acquisition, community health, safety, and security, grievance management, gender-based violence and harassment (GBVH), contractor management, and a worker Code of Conduct. These enhancements and expansions of its policies, procedures and standards will together provide a more comprehensive corporate E&S management system (ESMS) that can be integrated into the developing IMS.
For each of the WPPs, the company will under ESAP#2 prepare a commitment register listing all environmental and social commitments made by the company in the EIA documentation and supplemental assessments and acceptance of conditions of national permits and legal agreements. The register will specify which entity is responsible for implementing each commitment.
To implement the ESMS and deliver the commitments at asset level, as per ESAP#3, the company will, for each subproject, develop a set of construction phase Environmental and Social Management Plans (C-ESMPs) appropriate to their scale and complexity, as per the requirements of IFC PS1. Each C-ESMP will identify and describe in a comprehensive and structured manner the various E&S risks, and the controls and mitigation to be applied, during construction, to comply with IFC and national requirements, including any conditions and commitments arising from the EIA approval processes. They will cover, but not be limited to, contractor management; labor occupational health and safety (OHS); pollution prevention and control; waste management; water supply and wastewater management; traffic management, community health safety and security, biodiversity, cultural heritage, supply chain, emergency preparedness and response (EPR), stakeholder engagement and overarching monitoring plans. Each set of C-ESMPs will also define roles and responsibilities for their implementation, processes for capacity building and training, including Elementum’s and their contractors’ construction E&S teams.
The company Contractor Management Plans developed under ESAP#3 and ESAP#6 will be key in enforcing the E&S management plans and to provide an effective oversight of the EHS performance of its contractors, subcontractors, and other third parties during the various phases of the project, particularly during construction when a wide range of activities will be outsourced. The plan’s approach will be consistent with the general principles described within IFC’s Good Practice Note on Managing Contractors' Environmental and Social Performance, and will set out how these requirements will be addressed in the contractor selection process, contractor obligations, contract documentation, monitoring and reporting requirements and specific KPIs to be applied, relating to both E&S and OHS performance. Furthermore, the company will, through updates to its Sustainability Annex (ESAP#4), which forms part of all contracts, include legally binding obligations to comply with the company C-ESMPs commitments allocated to them in the commitment register, requirements of national legislation and IFC PS and requirements for inclusion of staff responsible for E&S H&S HR performance within the contractor team.
The company will require its main construction contractors on each of the subprojects to implement an overarching C-ESMP which details how the main contractor will implement the company’s C-ESMPs applicable to its activities and document how it has tailored its sub-project's construction methodology and engineering design to fully align with the company’s C-ESMPs (ESAP#5). The structure and content of the contractor’s construction ESMP will be fully aligned with the company’s ESMS and subproject construction C-ESMPs including adopted subproject-specific standards. Any subcontractors will be contractually bound to follow applicable E&S requirements, including IFC PS and WBG EHS Guidelines, and implement those portions of the contractor’s Construction ESMP that fall within its scope of work.
Before the start of operations at each subproject, the company will as per ESAP#6 develop a suite of Operations Environmental and Social Management Plans (O-ESMPs) including a contractor management plan, and require its main O&M contractor to implement contractor O-ESMPs aligned with those of the company. The BESS facility O-ESMPs will include OHS plan and EPRP giving specific attention to the prevention and management of the risk of fire and explosion, as well as off-gassing, which can be both flammable and toxic.
The company, as per ESAP#7, will appoint competent and sufficient company staff, and require its main contractor to do the same, to oversee, manage and report on E&S performance across all project phases. During construction, the company will employ as a minimum (either as its staff or contracted) an experienced project Environmental, Social, Health and Safety (ESHS) Manager, HR Manager, Community Liaison Officer(s), Health and Safety (H&S) Supervisor(s), Land Acquisition and Management Specialist and Biodiversity Specialist, and will, through contractual provisions (ESAP#4), require as a minimum the inclusion of ESHS, HR and H&S staff within its main contractor team. During operations, the company will, at a minimum, retain an ESHS Manager to oversee implementation of the operational ESMPs, supported by technical specialists to deliver specific operational management measures, notably those relating to biodiversity.
As part of the Construction and Operation ESMPs (ESAP#3 and ESAP#6), E&S monitoring requirements will be included for the construction and operation phases of the projects, including monitoring frequency, performance indicators, and targets. The company will oversee the implementation of the project's monitoring actions required and control contractor and subcontractor E&S performance.
PS2 – Labor and Working Conditions
During peak construction, up to 150 and 350 workers respectively will be at the Danube and Ternopil WPPs, the majority of whom are anticipated to be Ukrainian, although some expatriate workers may also be engaged. During operations, numbers will decrease substantially and are unlikely to exceed approximately 5–8 workers at the Danube WPP and 10–12 workers at the Ternopil WPP.
Ukraine has ratified the International Labour Organization (ILO) core labor standards, as defined in IFC PS2, which are incorporated in national law and the company’s HR policy, and Employee Handbook, are designed to deliver compliance with such legislation. The policy includes measures relating to prohibition of child and forced labor, bullying, harassment, sexual harassment, equal opportunities, employees’ rights to freedom of association and collective bargaining and working conditions including terms of written contracts, remuneration, working hours, overtime and leave, aligned with national laws and international standards, The handbook contains a workers’ grievance procedure, while the HR policy commits to employees’ training and career development. However, their scope and applicability apply only to Elementum.
As part of ESAP#1, the company will broaden the scope of its existing corporate HR and labor management policies and procedures where applicable to address gaps with IFC PS2 to apply to all project workers, including third-party workers, during construction and as relevant to the supply chain. As per ESAP#8, it will also develop and implement a project specific Labor Management Plan (LMP) applicable to all workers, including contractors and subcontractors, that are engaged on the project for all phases. The LMP will include a summary of, and signposting to, the relevant elements of the updated HR and labor management policies, procedures and Code of Conduct (CoC) and include specific sections on the recruitment process, violence, harassment and discrimination, grievance mechanism and labor management monitoring and reporting. It will identify specific opportunities for women to become a part of the workforce, and benefit from the vocational training and earned income. All workers, including contractors, will receive mandatory training on the CoC and written documentation on the terms and conditions of their employment as per IFC PS2 requirements. The company will closely monitor the contractor and their subcontractor’s compliance with the requirements set out in the LMP and conduct semiannual inspections and audits to assess and act upon alignment with IFC PS2, local labor laws and project labor and working condition commitments.
The enhancements to the CoC under ESAP#1 will include implementing at the corporate level provisions for addressing discrimination, harassment, and sexual exploitation and harassment and disciplinary measures for managers, who fail to act on such cases - areas which are currently not covered in the code. The company has developed and implemented a project level worker grievance mechanism (WGM) aligned with IFC PS2 available to all project workers, including contractors and subcontractors and third-party workers, and will disseminate information about its use (in languages that all workers understand). It includes (but not limited to) the following measures: (a) establishing a standalone accelerated channel with multiple reporting avenues (in person, writing, email, online, phone, and anonymously) and dedicated trained focal points for managing sensitive cases, such as discrimination, mobbing, harassment, and sexual exploitation, abuse and harassment (SEAH), in line with a survivor-centered approach, guarantees of confidentiality and non-retaliation; (b) identifying and providing accessible referral pathways for survivors, including psychological, medical, legal, and judicial services; (c) installing comment boxes across all project locations, with lockable boxes and printed comment forms; (d) options to report anonymously; (e) assigning a Grievance Coordinator to oversee worker grievances and a Focal Point to manage sensitive cases; (f) maintaining a centralized Worker Grievance Register to track all grievances and incidents; and (g) providing onboarding and annual training on the WGM to all workers, including third-party workers, as well as specialized training to manager, human resources personnel and focal points on how to handle and investigate sensitive grievances.
The accommodation strategy is yet to be finalized but it is anticipated that non-local project workers will be accommodated in apartments/hotels in nearby villages/towns, and a workers’ camp will not be required. As per ESAP#3, the company will develop a Worker Accommodation Plan aligned with IFC/EBRD Guidance Note on Workers’ Accommodation, Processes and Standards and national regulations, establishing basic standards for project accommodation (including that used by contractors and subcontractors). It will also require the worker to comply with the CoC in project accommodation and set out arrangements for handling accommodation related grievances, and specific considerations of GBVH. It will also specify the company’s monitoring and auditing arrangements, which will include a requirement for the company to periodically review the condition of project accommodation.
While the company has an Occupational Health and Safety Policy (2024) that commits the company to maintaining a safe and healthy work environment, it only applies to direct employees. At the project level the company will require through contractual clauses and the Contract Sustainability Annex (ESAP#4) that its construction and O&M contractors develop and implement asset specific OHS management systems, including risk assessments, and necessary plans and procedures, protective equipment commensurate to the project risks, as well as incident reporting and root cause analyses and monitoring that will apply to all project workers including contractors and subcontractors and third-party workers. At the BESS this will include adequate levels of protection of the workforce from fire explosions and off gassing. Workers will also be required to complete basic OHS training, with specific training provided for staff undertaking high-risk activities.
The above requirements will also be itemized in the update to the Sustainability Annex (ESAP#4) that form part of all of Elementum’s contracts relating to the project and that establishes the E&S and OHS standards that will be met by all contractors and their subcontractors working on it.
PS3 – Resource Efficiency and Pollution Prevention
The Danube and Ternopil WPPs are estimated to generate 169,200 and 568,698 MWh per annum respectively, with avoided greenhouse gas emissions estimated at approximately 474,468 tCO2e annually. Operational emissions from the BESS facility will be minimal.
No local water abstraction is anticipated during construction or operation, and there will be no dedicated batch plant. Water usage for construction of BESS and during all subproject operations will be negligible.
The construction of the two WPPs is expected to generate minor levels of pollutants to air, water, and soil, which are anticipated to be readily mitigated through the implementation of standard pollution prevention and control measures defined within the subproject ESMPs. A pollution prevention plan for each WPP implemented under the project will be developed and implemented within the company and contractor ESMPs (ESAP#3 and ESAP#6). Pollution arising from construction of the BESS and during all subproject operations will be negligible.
Noise and shadow flicker modelling, undertaken as part of the EIAs for both sites, was reviewed during the appraisal to take account of the subsequent changes to the WTG unit. This review confirmed that residential properties at both sites are sufficiently distant from WTGs to be unaffected by operational noise and for those at the Danube WPP to be unaffected by shadow flicker. Noise from construction activities at the two WPPs and from operation of the BESS facility will be negligible. The shadow flicker assessment for Ternopil WPP noted the possibility of some impacts at selected locations, but it was based on an earlier, much larger layout of 70 turbines and on conservative assumptions for periods of turbine operation, hours of sunshine and screening that do not reflect the current 32-turbine design. As per ESAP#9, the company will rerun the shadow flicker model for the currently proposed number and locations of WTGs and a more realistic operating scenario. Should this identify any exceedances of the IFC EHS guidelines, the company will install curtailment units into turbines predicted to cause flickering effects above the thresholds and implement measures to shut down affected turbines during such periods.
The two WPPs will generate significant volumes of solid waste during construction (and more limited volumes of liquid and hazardous waste), with negligible volumes of waste expected to be generated during operations, while construction and operation of the BESS will generate hazardous waste arising from toxic and corrosive materials used in its construction and from byproducts of its degradation. Solid waste disposal will be managed through licensed third-party waste contractors approved or contracted by the company. As part of ESAP#3 and ESAP#6, the company will for each of the two WPPs and the BESS develop and implement construction and operational Waste Management Plans (WMPs) that are aligned with local legal requirements, IFC PS3, and WBG EHS general guidelines. These will, amongst others, require assessment of potential waste disposal and treatment facilities including whether they are licensed by the relevant government regulatory agencies and operated to acceptable standards. The company will only approve facilities that are suitably licensed and where waste is disposed of and treated safely for human health and the environment. The main contractors will develop and implement WMPs aligned with those of the company (ESAP#5).
PS4 – Community Health, Safety and Security
No residential buildings are located within the safety buffer zone (defined as 1.5 times the length of the WTG blade, i.e., approximately 125m) around any of the WTGs at the two WPPs or those of the overhead transmission lines (OHTLs). During operations, agricultural activities will continue between the WTGs, which will be safe, although measures to protect agricultural workers will be needed during the winter periods, when snow and ice throw may occur. Potential risks to nearby community health safety and security, however, may arise from the presence of construction and security personnel, movement of construction traffic on local roads, and exposure to emergency events including damages related to the ongoing invasion. As per ESAP#10, the company will develop and implement a Traffic and Transport Management Plan (TTMP) which will include results of a road conditions survey prior to construction to establish baseline road conditions and identify required mitigation measures.
As per ESAP#3, the company will develop Community Health Safety and Security Management Plans (CHSMPs) for each of its subprojects that identify such risks and set out mitigation measures to be implemented by its contractors through development and implementation of their C-EMPS under ESAP#6. As per ESAP#11, the company will integrate local emergency service capacity and on-site first aid provisions into the CHSMP which will include measures to monitor and manage population influx risks, including trend analysis of community grievances related to workforce presence and opportunistic migration.
Active engagement to inform local people and those farming or otherwise using the land around the WPPs, of any hazards will be communicated through the Stakeholder Engagement Plan (SEP) developed as per ESAP#19. A worker's code of conduct (including conduct within accommodation facilities) (ESAP#1) and interactions with local community members (ESAP#19), will clearly define project commitments and individual worker responsibilities with respect to communities, including specific measures to address GBVH risks. Additionally, under ESAP#3, Emergency Preparedness and Response Plans (EPRPs) will be developed in consultation with affected communities, incorporating risks to health and safety of the potentially affected communities and other stakeholders; at the BESS facility, the EPRP will include consideration of risks to local communities and user of the land around the project from fires and explosion as well as off gassing scenario events.
The private security staff provided by the contractors during construction and operation will be unarmed. Given the ongoing security situation in Ukraine, security risks will be managed in coordination with relevant public authorities and in accordance with national legislation and IFC PS4 requirements. As part of the ESMPs developed under ESAP#3, the company will undertake for each of the two WPPs a security management assessment and develop a plan aligned with IFC PS4, which will be applicable to the company and its contractors (and their subcontractors) and will take into consideration both private and public security. This will include security screening and selection/evaluation procedures, and a security code of conduct to guide the interactions between security personnel, workers, and community members as well as provisions for systematic training including regarding GBVH and the use of force. All security incidents will be recorded and investigated, and corrective actions will be implemented. The project's external grievance mechanism developed as per ESAP#19 will be available for members of the community or employees in the event of a violation of the code by employees, security personnel or other grievances related to security.
The main road traffic risk associated with the project arises from risk to safety and traffic disruption to other road users and local communities from the transport of project components to the site. Additional risks related to transport of site workers, supplies, material, and water while the movement of vehicles may require road upgrades to accommodate them, and result in damage to roads and to roadside structures. To manage these risks, the contractors will under ESAP#5 develop subproject-specific Traffic Management Plans for each site, informed by abnormal load road transport surveys and related measures.
PS5 – Land Acquisition and Involuntary Resettlement
The project will not result in any physical displacement. The BESS is situated within an existing company facility, and the areas required for the WPPs are located on land previously designated for agricultural use and currently farmed by agricultural enterprises under lease agreements. These areas are currently used for agricultural activities by commercial enterprises under lease arrangements with private and communal landowners.
Although Ukrainian law allows compulsory acquisition of land for energy projects, the company’s policy for land acquisition prohibits expropriation, commits to the highest standard of protection in case of displacement, and is generally IFC PS5 aligned, but has no documented procedure for its implementation. As per ESAP#12, the company will develop an IFC PS5 aligned Land Acquisition and Compensation Framework to be applied to any future land acquisition.
The required land is being secured for 49 years through a combination of leases (for WTG foundations) and easements (for temporary construction activities, roads, underground cabling and OHTLs) agreed with the owners, with compensation based on Ukrainian law. Payments to owners are made annually for leased lands, and as single lump sums for easements. Farmers who rent the land are also compensated through single payments whenever loss of access occurs, to cover the value of unharvested crops or disruption of farming activities.
Impacts have been minimized through prioritizing land to be acquired both through leases and easements, based on willingness of the owners and siting of access roads on existing field boundaries and tracks, 90% of which are on communal land. Risks due to economic displacement are expected to be low as the lease and easement agreements stipulate that the affected landowners and users are entitled at no cost to continue cultivating the land, except where the permanent infrastructure is located. Although numbers are yet to be finalized, a number of landowners and land users will be affected primarily through easement agreements, including commercial agricultural enterprises leasing the land.
While the land acquisition process addresses certain IFC PS5 requirements and no disputes have been reported, there are some gaps, notably in relation to consultation, consideration of vulnerable groups, documentation, grievance mechanisms and post compensation monitoring. As per ESAP#13, the company will engage a suitably qualified and experienced consultant to conduct a review of the land acquisition and compensation process adopted to date against the applicable national standards and requirements of IFC PS5. The review should cover consideration of the socio-economic position, including current livelihood status and standards of living, of the owners and users of affected land, with specific attention given to vulnerable groups. This will, with other considerations, inform an evaluation of the process adopted including consultation, valuation methodology and adequacy of compensation applied, and the identification of potential impacts the management of which may require some further attention. It will also provide a description of the roles and responsibilities of the various stakeholders in the land acquisition process, an analysis of any grievances received, and impacts experienced to date and will outline the measures to be implemented to fill any identified gaps.
As per ESAP#14, the company will develop a Land Entry and Exit Procedure which establishes compensation status prior to entry. This will include the requirement for pre-construction and post construction surveys of all affected land plots, in collaboration with landowners and land users, to establish a baseline and post works land conditions. It will also describe the mechanisms, and details of the nature and scope of documentation, to be used by the main contractor to report to the company on application of land entry and exit protocols.
PS6 – Biodiversity Conservation and Sustainable Management of Living Natural Resources?
The Danube WPP and the BESS are in the Pontic steppe ecoregion of the temperate grasslands, savannas, and shrublands biome within a mix of Natural and Modified Habitat composed of shelterbelts of trees, steppes, meadows, pastures, and agricultural areas. They do not overlap any Legally Protected or Internationally Recognized Areas. Priority bird species at the Danube WPP site comprise the Lesser Spotted Eagle, Osprey, Western Marsh Harrier, Eurasian Buzzard, Little Sparrowhawk, Common Kestrel, White Stork, Great Cormorant, White-fronted Goose, Greylag Goose, Caspian Gull, Black-headed Gull, Grey Heron, Common Crane, Great White Pelican, Mute Swan, Great Crested Grebe and Mallard (IUCN Red List -Least Concern). Risks of collision are predicted as less than 0.4 bird per year for the Caspian Gull and less than 0.1 bird per year for other bird species, representing a negligible mortality rate relative to their European population levels. Other priority biodiversity values include shelterbelts and bat species, of which Nathusius’ Pipistrelle, Common Noctule, Eurasian Serotine (IUCN Red List – Least Concern) are the most recorded species.
The Ternopil WPP is within the Central European mixed forests ecoregion of the temperate and broadleaf mixed forests biome and is situated in a mix of Natural and Modified Habitat comprising small fragments of mixed deciduous woodland and meadow-steppe habitats, used for grazing. While not within any Legally Protected or Internationally Recognized Areas, certain WTGs are located in proximity to an Emerald Site; however, all project infrastructure remains outside its designated boundaries.
Priority bird species at the Ternopil WPP site include the Northern Lapwing (IUCN Red List – Near Threatened), Common Buzzard, Greater Marsh Harrier, Common Kestrel, White Stork, Mute Swan, Greater White-fronted Goose (IUCN Red List – Least Concern) and other migratory bird species. Other priority biodiversity values are the mixed deciduous woodland habitat, where some of the WTGs are located, and bat species including the Parti-colored Bat, Common Noctule and Eurasian Serotine (IUCN Red List – Least Concern).
None of the subprojects are in Critical Habitat (CH) for any of the identified priority biodiversity values although IFC Natural Habitat (NH) No Net Loss (NNL) requirements apply to all the identified priority biodiversity values.
Per ESAP#3 and ESAP#15, for each WPP, a construction-phase Biodiversity Management Plan (BMP) will be developed setting out measures for safeguarding biodiversity values, including pre-construction check-ins and rescue/relocation procedures for individual species and establishment of exclusion zones including the Natura 2000 Site and areas of Natural Habitat, and Elementum will appoint biodiversity specialists responsible for management, monitoring and reporting of all biodiversity mitigation activities. To minimize electrocution risk, appropriate technical design and mitigation measures consistent with good international industry practice will be applied, including safe distancing and insulation where necessary. Additional mitigation measures will be implemented as required in accordance with international good industry practice.
Although collision risk assessments for birds have not been conducted to date at Ternopil WPP, baseline data on the species and habitats they are associated with indicates that risks and impacts on birds and bats are relatively low. As per ESAP#16, at Ternopil WPP, supplementary bird and bat surveys will be undertaken in 2026, including Spring and Fall bird migration vantage point (VP), breeding bird and bat roost and activity surveys, to identify high-risk areas for the species and inform a collision risk assessment, the construction phase BMPs, and the design of a Post-Construction Fatality Monitoring (PCFM) Program. Ahead of the operations-phase, Elementum will contract a specialized wind-wildlife consultancy to design and subsequently implement a robust PCFM following recognized good practice to accurately generate unbiased fatality rate estimates (ESAP#17). This will, as a minimum, include (i) systematic carcass searches conducted at weekly intervals year-round under all turbines with transects 6-m in width, (ii) implementation of an adequate number of industry-standard bias correction measures for searcher efficiency (detectability), carcass removal (scavenging), and unsearched and unsearchable areas, (iii) industry standard statistical calculation of total, bias-corrected bird and bat fatality. For bats, in addition to carcass searches, acoustic bat monitoring using detectors installed at the WTG nacelles will inform smart curtailment, if needed. The PFCM program will initially run for three years and will be subject to extension depending on fatality results. The first strategic review of the PCFM program will take place 6 months after the start of the operations phase and then continue on a semi-annual (2x/year) basis.
Elementum will also develop and implement an operations-phase BMP (ESAP#18), including but not limited to: (i) blade feathering up below turbine cut-in speed from 1 July to 20 September, to minimize bat collision risk; (ii) dimming, avoiding light trespass and adapting lamp spectra to minimize light impacts specifically on bat species to the extent permitted by the national laws; (iii) confirmation of priority biodiversity values from PCFM results; (iv) threshold setting for priority biodiversity values following the potential biological removal method; and (v) an adaptive management strategy under which, if the PCFM review identifies exceedance of defined thresholds, the company will, in consultation with IFC, develop and subsequently implement additional mitigation measures including as needed observer-led shut-down on demand for birds, and smart curtailment for bats.
