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
Environmental and Social Management Systems: Scatec has a corporate ESMS that includes principles for business conduct, the procedures for identifying and managing environmental and social risks and impacts and the organizational requirements for operating the ESMS in accordance with IFC's Performance Standards and WBG EHS Guidelines. In addition, Scatec's corporate ESMS is also ISO certified (ISO 9001, ISO 14001, and ISO 45001).
As part of its engagement with IFC on the Phase 1 Project, Scatec developed a project specific ESMS, aligned with its corporate ESMS, to identify and mitigate project induced risks and impacts. Scatec has also developed and implemented an internal risk assessment process for Phase 1 in accordance with IFC PS requirements. In addition, Scatec developed and maintains a project legal register/permitting plan capturing all the required and potentially required permit/license requirements. As per ESAP #1, the existing ESMS for Phase 1 will be updated to incorporate the identification and management of risks and impacts associated with Phase 2 in accordance with Scatec requirements, the IFC Performance Standards, WBG EHS Guidelines and national legislative requirements.
Policy: Scatec has corporate policy statements demonstrating its commitment to E&S management that include amongst others: i) Sustainability Policy, ii) Code of Conduct (CoC), iii) Health, Safety, Security and Environment (HSSE) Policy, iv) Human Rights Policy, v) Human Resources Policy, vi) Diversity and Inclusion Policy, and vii) a Global Labor Policy for site personnel. Scatec also developed project level E&S policies reflecting the Project's corporate policy commitments.
Identification of Risks and Impacts: The project E&S Impact Assessment (ESIA) for Phase 2 was conducted in 2024 to meet IFC Performance Standard requirements, specifically to include transport impact assessment, a socio-economic baseline, stakeholder engagement, specialist ecological studies, cumulative impacts, waste impact assessment, hydrogeological studies, and further archaeological investigation. Key impacts identified as part of the ESIA include, among others: (i) dust and noise; (ii) transport management of heavy equipment; (iii) community mobility across the area due to fencing of both Phase 1 and 2 sites; (iv) management of expectations from local community on access to employment; (v) loss of vegetation; and, (vi) management of contracted labor.
Management Programs: The corporate ESMS states that a set of E&S management plans (ESMP) required for the project must be identified and developed as an outcome of a project specific risk assessment, and an ESIA carried out for the project should be developed as part of the project ESMS. The management of E&S risks and impacts at the Project level will be the responsibility of the EPC (during construction) and the O&M (during operations). In this regard, as per ESAP #2, Scatec will develop a project level construction and operation ESMP to address both construction and operational risks and impacts from phase 2 of the Mmadinare Solar Project. Scatec’s ESMS (ESAP #1) will include the development of a robust contractor management plan highlighting the E&S obligations and requirements of the EPC and O&M during construction and operation in tender documents and legal contracts, undertaking regular monitoring and reporting of contractor performance (see Monitoring & Review section below), and trainings to improve E&S performance for low capacitor subcontractors. This will include written contractual obligations for potential sub-contractors.
Monitoring and Review: The Scatec corporate ESMS requires regular monitoring of project activities and the implementation of E&S management plans. As defined in the contractor management plan (ESAP #1), the EPC and O&M will be required to provide Scatec with monthly operational reports during construction, and quarterly reports during operations. Onsite E&S monitoring will be carried out by assigned and trained EPC and O&M employees and cover the broad area of influence of all construction and operation related activities. The corporate ESMS also requires internal auditing of projects by the Scatec corporate HSSE and human resources (HR) teams and external auditing by third parties. These requirements will be reflected in the project level ESMS that will be applied for Phase 2.
Organizational Capacity and Competency: Scatec developed a project management organogram defining roles and responsibilities at the SPV, EPC, and O&M levels during construction and operations. At the project management (SPV) level, these include i) Environmental and Social Manager, ii) health, security, and safety advisor, and (iii) industrial relations specialist. At the site level, Scatec’s additional resources include i) health, security, and safety manager, ii) Community Liaison Officer (CLO); and, iii) HR administrator.
Emergency Preparedness and Response: The Scatec corporate ESMS requires that emergency preparedness and response plans (EPRP) are developed for each of its projects and should include a review of potential risks and incidents associated with the project's development, construction and/or operations that may impact the environment and/or the surrounding communities. At the project level, Scatec has in place an EPRP that covers Phase 1. The existing EPRP will be enhanced and refined as necessary, as part of the overall ESMP update (ESAP #2), to address additional risks associated with Phase 2, as well as physical climate risks and emergencies emanating from potential flooding and heatwave scenarios.
PS2: Labor and Working Conditions
A total peak construction workforce is anticipated to be 325 personnel (about 98% being construction workers and the rest hired directly by Scatec) with a total operations workforce for the project estimated to be 6-8 people.
Human Resources Policies and Procedures: Scatec developed corporate policies which define the company's approach to HR in line with PS2 and local labor law requirements. Scatec's Code of Conduct (CoC) references applicable policies where relevant (i.e. sustainability policy, HSSE policy etc.) and includes statements, among others, on i) opposing all forms of slavery, forced labor, trafficking, illicit forms of child labor and violations of human rights in Scatec operations; ii) opposing differential treatment based on color, nationality, ethnicity, gender, age, sexual orientation, disability, religion or belief and zero tolerance policy on sexual harassment; iii) commitments to zero harm for employees, iv) supply chain, including the requirement for undertaking an internal due diligence on suppliers; and v) whistle blowing, including a statement indicating that any potential violation of the law, Scatec's procedures or the CoC can be reported.
As part of Phase 1, Scatec developed an HR manual for construction and operations in accordance with IFC PS2 and local labor law requirements. The HR manual covers terms and conditions of employment, such as remuneration, working hours, leave, working shifts, etc., and will also cover direct and indirect workers engaged in the project’s Phase 2 activities.
Workers Organizations. Scatec’s global HR Policy states that the company acknowledges freedom of association and collective bargaining as a labor right of all employees. Employees have the right to join labor unions or form workers’ organizations. The existing HR manual for Phase 1 states that every worker has the right to assemble, associate with others, and form trade unions or other associations and will not be discriminated against for doing so.
Grievance Mechanism: Scatec established a grievance mechanism and is being implemented as part of Phase 1 with contracted workers having access to the mechanism, including setting up suggestion boxes at the site. Dissemination sessions to construction workers on the grievance mechanism are being implemented by the project. The existing grievance mechanism will be accessible to Phase 2 contracted workers and additional dissemination sessions on the grievance mechanism will be conducted (ESAP #4).
Third party workers: Scatec has in place a third-party workers’ monitoring procedure to systematically check working conditions and terms of employment of construction workers in line with country labor laws and IFC PS2 requirements. Gaps identified are communicated to the EPC and a time-bound corrective action plan is developed for Scatec to monitor its closure.
Occupational Health and Safety (OHS): The corporate HSSE procedure states that Scatec projects must have documented systems for the management of risks associated with OHS, security, and environment. As per ESAP #1, the existing ESMS for Phase 1 will be updated to incorporate the identification and management of such risks and impacts associated with Phase 2. This will include, but not be limited to, potential OHS risks associated with both construction and operational activities.
As part of the construction phase ESMP development (ESAP #2) and in line with recent supervision findings, Scatec will update its contractor management procedure to incorporate regular revision of contractor risk assessment procedures aimed at ensuring that adequate controls are in place for all hazards identified including installation of all in-vehicle monitoring systems or tracking devices and reporting of violations in a way that proactively prevent road traffic incidents.
Supply Chain: Scatec's Code of Conduct encompasses responsible sourcing provisions, mandating that suppliers ensure the absence of forced labor in their supply chains. Contractually, Scatec includes specific language around Business Conduct Principles, Forced Labor and Traceability Compliance in both main agreements, supply contracts and sub-contractor obligations. Scatec's business partners will comply with the Code of Conduct which also extend to the project. The Code of Conduct specifically prohibits sourcing from certain PV material-producing regions. Scatec also conducts Integrity Due Diligence (IDDs) assessments on all suppliers’ pre-contract, with Scatec’s compliance team also screening the subcontractors in the bill of materials proposed for the production of the PV Modules used in a specific project. As done for Phase 1, Scatec will audit a sample of products to identify potential labor issues in the supply chain, particularly related to forced labor (ESAP #3).
PS3: Resource Efficiency and Pollution Prevention
Greenhouse gases: The greenhouse gas (GHG) emissions associated with the Selebi Phikwe Solar PV project are minimal and short term. The limited direct (Scope 1) GHG emissions produced for Phase 2 will primarily stem from fuel combustion from construction equipment and transportation of equipment, materials, and employees to the site during the construction phase. The operations phase will typically consume insignificant quantity of diesel. Indirect GHG emissions are mostly associated with the manufacturing and transport of the materials. The proposed solar project will enable a potential 1,678,387kg CO2-eq reduction in future emissions by fossil fuel burning.
Air Quality: The principal source of air emissions during the construction phase relates to dust emissions because of vegetation clearance, earthmoving and the transportation of materials, construction equipment, transformers, cables as well as solar panels. Management of these aspects will be through dust suppression mitigants included in the project ESMP (ESAP #2), as described in PS1.
Noise: During the installation phase, noise may be generated because of the operation of equipment, vehicles and machinery, the transportation of construction materials and staff to and from site, the establishment of site construction areas, as well as general construction activities. Management of these aspects for the closest sensitive receptors at Mapakata will be through the project ESMPs (ESAP #2), as described in PS1.
Water consumption: The installation of PV equipment requires minimal water usage, primarily for sanitary purposes and dust suppression. Water will be used for cleaning of solar panels once a year during operations. Management of water use will be done through a Water Management Plan as part of the project ESMP, as described in PS1. Automated dry-cleaning using mounted robots is also planned for the panels.
Waste Management: Typically, wastes generated from the installation of solar equipment include i) packaging material, such as the cardboard, plastic and wooden packaging and off-cuts, ii) hazardous waste from empty tins, oils, soil containing oil and diesel (in the event of spills), and chemicals; iii) building rubble, discarded bricks, wood and concrete, iv) domestic waste generated by personnel from chemical toilets, and v) vegetation waste generated from the clearing of vegetation. The ESIA identifies historic waste across the project footprint and highlights the non-compliance nature of the Selebi Phikwe landfill. It further identifies a list of waste management providers across Botswana capable of handling non-hazardous waste recycling as well as used oil. Scatec shall enhance the existing waste management plans as per ESAP #2 and will optimize local waste management through re-use, recycling, and incineration in approved incinerators.
Botswana does not have a hazardous waste landfill. Any hazardous waste (such as contaminated soil from spillages, used oil, filters, battery, chemicals, damaged PV cells etc.) will be temporarily stockpiled in designated areas on site (i.e., placed in leak-proof storage skips), and thereafter removed from site by a suitable service provider for bioremediation (soil) and safe disposal at a registered hazardous waste disposal facility outside Botswana (ESAP #2). The project waste management plan will include requirements for PV cells and associated components recycling via an appropriately scaled PV cells recycling program.
As per ESAP #5, and in accordance with the relevant IFC EHS Guidelines, Scatec will undertake a site pre-clearance to remove all the historic waste identified including confirming and removing of potential asbestos scatters from a damaged buried abandoned cement irrigation pipeline that traverse the project site, using a specialized and trained service provider.
Wastewater Treatment. During construction, wastewater streams include effluent from ablution facilities and wastewater from cement batching activities. The wastewater treatment plant in Selebi Phikwe (operated by WUC – Water Utility Corporation) is not licensed. In this context, Scatec is considering three alternative options: (i) haul the waste to an approved waste treatment facility about 800kms away; (ii) contribute to the overall improvement of the Selebi Phikwe municipal wastewater treatment plant as a trade-off for disposing the low volumes of wastewater; or (iii) acquire a portable packaged treatment facility. Scatec is required to provide a strategy on wastewater management as per ESAP #2. During operation only small quantities of effluent waste will be generated from ablution facilities with only 8 employees on site, for which a small-scale biodigester is planned.
PS4: Community Health, Safety and Security
As per the Project ESIA, the following key potential community health and safety impacts during the construction phase are: i) nuisance from noise and dust; ii) increase in construction road traffic accidents; and, iii) increased potential for Gender Based Violence (GBV) and sexually transmitted infections (STIs) given the existing environment (see below). Measures to mitigate these risks will be included in the Phase 2 ESMP (ESAP #2), including a training and awareness raising program on HIV/AIDS among workers and communities given the high prevalence of HIV/AIDS in the project area.
Security measures for the project will include i) electrified fencing, and ii) third party security contractors primarily used for access control (unarmed). The Project has undertaken a Phase 1 security risk assessment including both construction and operations phases, resulting in the development of the Security Management Plan (SMP). As a component of ESAP #2, this existing SMP will be updated and refined to cover security related risks and activities under Phase 2, including an updated risk assessment if necessary, and continuous training requirements for security personnel. The SMP will be aligned with the requirements of IFC PS4 and the Voluntary Principles on Security and Human Rights.
The contextual risk for GBV around the project area is considered moderate to high as per the ESIA and has been exacerbated due to the closure of the nearby BCL mine leading to loss of jobs and further poverty. A GBV assessment was conducted as part of Phase 1 resulting in an action plan for which Scatec is currently implementing starting with awareness trainings with the construction workforce and surrounding communities. The Project will continue implementing the existing GBV action plan as part of Phase 2 activities.
