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 Policy and Management System: Transnova follows the Sustainability Policy of its parent company: Grupo de Energia Electrica de Bogota (GEEB), which commits the company to conducting all operations under a sustainability framework that balances value creation, community well being, and environmental protection, grounded in human rights and the Sustainable Development Goals (SDGs). The Policy it sets clear obligations to ensure worker OHS, legal compliance, early risk management, stakeholder engagement, environmental stewardship, and continuous improvement of its ESMS. Additionally, GEB has in place a Human Rights Policy aligned with United Nations and International Labor Organization standards. It integrates human rights into its strategic risk management through a due diligence system that monitors employees, contractors, and partners. The policy specifically prioritizes diversity, equity, and inclusion (DEI) alongside the protection of minorities to ensure sustainable development and social respect across all countries of operation.
These policies are operationalized through Transnova’s ESMS, which is aligned with ISO 14001:2015 for Environmental Management and IFC PS1 principles, and included procedures for identifying and managing impacts, complying with legal requirements, monitoring commitments, handling emergencies, and continually improving performance.
Identification and Management of Risks and Impacts: The company identifies E&S risks primarily through Environmental and Social Impact Assessments (ESIAs) by local regulations, and approved by the environmental authority, and through instruments such as Transnova’s E&S Risk Assessment and Management Procedure (ESRAMP). In terms of E&S management programs, the company implements mitigation and performance improvement measures through E&S procedures, environmental management plans, contractor oversight, and thematic programs on biodiversity, climate change, and community development.
As part of ESAP #1, Transnova will adopt an ESRAMP fully aligned with the IFC PS and relevant WBG EHS Guidelines for all IFC-financed subprojects. This procedure will build on the current corporate-level ESRAMP and will incorporated enhanced E&S risk assessment, including analysis of alternatives and cumulative impacts where needed and management measures for relevant E&S aspects (e.g. social, biodiversity, etc.) including clearly defining responsibilities and performance indicators.
While the two subprojects identified for IFC financing (i.e. SJC and Atlantico) do not affect Indigenous Peoples’ territories, as part of ESAP #1, the ESRAMP for IFC-financed subprojects will include measures for the application of PS7 if needed for any future IFC-financed subprojects, including Informed Consultation and Participation (ICP)/Free, Prior and Informed Consent (FPIC) and other PS7 measures, with support of a qualified expert.
At the subproject level, both SJC and Atlantico have prepared ESIAs (see Client Documentation) in accordance with local regulations, Transnova’s practices, and broadly aligned with the principles of IFC PS1, identifying E&S impacts and associated mitigation measures in a manner commensurate with risks, which are of limited scope and magnitude. This includes an analysis of alternatives and consideration of incremental impacts (drawing on elements of cumulative impact assessment) and is supported by participation and consultation processes. Additional subproject-level supplemental actions to address remaining gaps are reflected in the ESAP agreed upon with Transnova.
Organizational Capacity and Competency: Transnova adequate organizational structure and staffing arrangements to implement its ESMS, with defined roles. The Company employs specialized E&S personnel, including a dedicated social management team for stakeholder engagement, and has a specialized land acquisition and resettlement team. Environmental roles and contractor responsibilities are defined under the Environmental Management Manual, including mandatory E&S training. Transnova also benefits from the strong institutional capacity of its parent group, which demonstrates robust E&S training and internal audit systems. To further strengthen alignment with IFC PS1, per ESAP #2, Transova will implement an E&S Training Program for its staff, contractors and subcontractors linked to IFC-financed subprojects on IFC PS, relevant WBG EHS Guidelines, and the deliverables in the ESAP, including aspects like biodiversity and Indigenous Peoples.
Emergency Preparedness and Response: Transnova has established and actively implements emergency preparedness and response plans (EPRP) at both corporate and subproject levels, including for contractors. These EPRPs address spill containment, fire response, training and drills, medical evacuation, and disaster response, and are supported by detailed environmental and OHS procedures that define step-by-step response actions, roles and responsibilities, evacuation processes, and coordination mechanisms. Mandatory participation of employees and contractors in emergency drills is required, supported by standardized inspection and safety monitoring formats, and reinforced through contractual obligations for contractors to maintain site-level emergency response plans. To further align with PS 1 and 4, Transnova will, under ESAP #12, 13 and 14, incorporate into stakeholder engagement measures applicable to all IFC-financed subprojects measures to ensure community level coordination and feedback in subproject-level EPRPs.
Monitoring and Review: Transnova has established monitoring procedures under its ESMS with KPIs covering E&S performance monitoring, including regular inspections and internal audits. Environmental commitments are tracked through centralized tools. To further align with IFC PS1, as part of ESAP #1, the ESRAMP for IFC-financed subprojects will include a Monitoring and Review component incorporating social performance metrics.
PS2: Labor and Working Conditions
Human Resources Policies and Procedures: Transnova’s HR policies and procedures are aligned with IFC PS2 requirements and are applicable to all its employees and contractors and include zero tolerance for child and forced labor, no discrimination and equal opportunities, freedom of association, no tolerance to sexual harassment, and protection of workers from other types of labor harassment and other types of abuse. The internal labor regulations establish the rights and obligations related to labor and working conditions for workers and for the company and describe the general principles and guidelines for their application.
Non-Discrimination and Equal Opportunity: Transnova’s policies prohibit discrimination based on gender, age, disability, and other protected characteristics, as outlined in the internal labor regulations. These commitments are reinforced through the Human Rights Corporate Policy, the Code of Conduct, and Security and Health Labor Handbook. The provisions in these policies are equally applied to all employees and contractors.
Workers’ Grievance Mechanism: Transnova’s Ethics Channel outlines a workers’ grievance mechanism (WGM) that is available to employees and contractors allowing reporting of inappropriate conduct, harassment, discrimination, and other internal issues through confidential and anonymous channels. The procedure includes defined responsibilities for receiving and following up on reports and provides multiple access points for submitting complaints. As part of ESAP #3, Transnova will review and revise its Ethics Channel to include a wider variety of channels to submit grievances, a detailed, clear, and transparent process to register and resolve grievances in a prompt manner, providing timely feedback to those concerned, and without retribution and allow for anonymous grievances. The mechanism will be widely disclosed among direct and contractor workers. The WGM will have a specific process to address and resolve cases of sexual exploitation, abuse, and harassment (SEAH) with a survivor-centered approach.
Occupational Health and Safety (OHS): Transnova has an OHS Management System consistent with IFC PS2 requirements, as documented in its OHS Manual and contractor OHS requirements. The system defines procedures for hazard identification and risk assessments, mandatory inductions, use of personal protective equipment (PPE), inspections, incident and near miss reporting, emergency roles, and corrective actions, and applies to both employees and contractors. Binding OHS obligations for contractors are enforced through a contractual annex that requires pre mobilization verification of training, certifications, risk assessments, and equipment maintenance records, supported by periodic audits during execution. OHS performance is monitored through monthly frequency and severity indicators, with a target of zero incidents, and is reinforced by regular safety talks, task specific training for high risk activities (including work at heights and confined spaces), and sustained inspection programs showing improving compliance.
PS3: Resource Efficiency and Pollution Prevention
Greenhouse Gases, Resource Efficiency and Water Consumption: The GHG emissions from operations in the IFC-financed subprojects will be very limited and well below 25,000 tCO2e/year. The company’s ESMS includes process optimization to reduce resource use, including energy and water. Water use is very low due to the characteristics of the company’s operations
Pollution Prevention and Electro Magnetic Fields (EMF): Transnova has in place robust pollution prevention procedures aligned with IFC PS3 requirements as part of its ESMS. In relation to EMF, Transnova currently manages such risks through compliance with national regulatory requirements, which apply exposure limits established under Governmental Agreement No. 08-2011 based on International Commission on Non-Ionizing Radiation Protection (ICNIRP) guidelines. EMF measurements are conducted beneath transmission towers in accordance with national requirements. To enhance these measures, as part of ESAP #4, Transnova will adopt an EMF Monitoring Plan aligned with WBG EHS Guidelines for IFC-financed subprojects, defining exposure limits, sensitive receptors, monitoring locations and frequency, methodologies, responsibilities, reporting procedures, and corrective measures as needed, ensuring a systematic and preventive approach to EMF risk management.
Hazardous Materials Management & Polychlorinated Biphenyls (PCB): Transnova has robust procedures in place for hazardous materials management. To further enhance alignment with IFC PS3, as part of ESAP #1, the ESRAMP for IFC-financed subprojects will include additional, specific procedures for spill prevention and secondary containment structures associated with the transport and storage of dielectric oil used in electrical transformers by contractors. These procedures will also address the storage and handling of chemicals and dielectric oils in alignment with the relevant WBG EHS Guidelines.
In line with local regulations and international good practices, Transnova enforces Polychlorinated Biphenyls (PCB)-free procurement practices and the IFC-financed subprojects will not involve PCB containing equipment.
Pesticide Use and Management: Vegetation clearing for IFC-financed subprojects will be conducted primarily through manual methods, resulting in minimal pesticide use. To ensure alignment with IFC PS3 and the relevant WBG EHS Guidelines, as part of ESAP #1, the ESRAMP will include a Pesticide Management Protocol (PMP) that will prohibit pesticide use where feasible, prioritize Integrated Pest Management (IPM), and exclude all banned or highly hazardous pesticides. Where unavoidable, only nationally approved products will be used, handled by trained personnel with appropriate safeguards for workers, communities, and the environment.
PS4: Community Health, Safety and Security
Community Health and Safety: Tranvova has in place internal OHS and emergency procedures that indirectly reduce risks to surrounding communities, including the OHS Manual and the ERPPs. These documents define operational controls, emergency response steps, and responsibilities for events that could also affect communities. The Community Grievance Mechanism provides a channel for communities to report safety-related concerns. As part of ESAP #1, the ESRAM for IFC-financed subprojects will include a Community Health and Safety Procedure aligned with IFC PS4 and relevant WBG WHS Guidelines with steps required to prepare Community Health and Safety Plans (CHSP) for each future IFC-financed subprojects, including measures aimed at mitigation any risks related to project-related transport and workers’ interactions with communities. Additionally, as part of ESAP #5 and 6, Transnova will develop subproject-level CHSP for SJC and Atlantico, including hazard identification, analysis of potential impacts on Affected Communities including communicable disease risks, and preventive and control measures proportional to the project’s risks, including project-related transportation.
Security Personnel: Transnova engages a private security firm to provide protective services at its substations. While existing policies and procedures for managing security risks are robust and include human rights training, Transnova will, under ESAP #7, adopt a Security Management Plan (SMP) consistent with IFC PS4 for IFC-financed subprojects. The SMP will define procedures for incident reporting, response, documentation, contractor vetting, Code of Conduct, and training requirements, including prevention and management of SEAH. In addition, the Grievance Mechanism (GM) for IFC-financed projects under ESAP #12, 13 and 14 will include protocols for reporting alleged abuses by security personnel and protecting complainants.
PS5: Land Acquisition and Involuntary Resettlement
Transnova implements a Land Acquisition and Resettlement Procedure (LARP) aligned with IFC PS5 principles, which establishes processes to identify and document potential physical and economic displacement, quantify affected persons, and apply mitigation measures, including compensation at replacement cost and livelihood restoration when required. To date, rights-of-way (RoW) and servitudes have been secured through negotiated agreements without the need to recourse to expropriation, supported by a robust micro-siting process designed to avoid or minimize displacement. Under ESAP #8, Transnova will further strengthen the LARP for IFC-financed subprojects by formally documenting alternatives analyses, including micro-siting and design options undertaken to minimize displacement prior to land acquisition. As a result, an upfront alternatives analysis will be required for new IFC-financed subprojects, and Resettlement Action Plans (RAPs) and/or Livelihood Restoration Plans (LRPs) will be prepared, implemented, and monitored as needed.
In relation to the subprojects identified for IFC financing, SJC resulted in partial impacts on 22 properties related to tower locations and RoW/servitudes, with physical displacement fully avoided and economic displacement minimized and mitigated through compensation for affected crops in line with PS5. For Atlantico, approximately 160 properties are expected to be partially affected by land requirements for towers, RoW, and servitudes; land assessments are ongoing, and no physical displacement is anticipated. As per ESAP #9 Transnova will develop a Livelihood Restoration Plan (LRP), and if any physical displacement is required , it will be supplemented by a Resettlement Action Plan (RAP).
PS6: Biodiversity Conservation and Sustainable Management of Living Natural Resources
Transnova applies multiple good international industry practice measures to manage biodiversity risks, including alternatives analyses to avoid Natural Habitat, drone-based cable installation to minimize vegetation clearing, no construction of new access roads (using mules or horses where access is limited), selective vegetation trimming only when essential, and installation of bird flight diverters near aquatic habitats. This measures are To ensure that these measures are systematically applied to all IFC-financed subprojects, including any future subprojects that may be proposed under the IFC financing, Transnova will, pursuant to ESAP #10, adopt and implement a Biodiversity Management Procedure (BMP) aligned with IFC PS6. The BMP will include requirements for habitat classification, application of the mitigation hierarchy, achievement of No Net Loss or Net Gain where applicable, and implementation of a two-year Post-Construction Fatality Monitoring (PCFM) program, as required. These measures were applied during construction of the existing SJC and are broadly consistent with PS6 and will be formalized and consistently applied through the BMP going forward.
In relation to SJC and Atlantico subprojects, the principal biodiversity risks relate to limited habitat loss associated with tower footprints (predominantly in Modified Habitat) and potential wildlife collision/electrocution risks, which are expected to be low for high voltage lines and tall towers. voltage lines and tall towers.
Both subprojects identified for IFC financing, namely SJC and Atlantico, are located in distinct Guatemalan ecoregions. San Juan Comalapa is located in the Central American pine–oak forests ecoregion (1,600–1,880 masl) within a landscape dominated by Modified Habitat (70–80%) with remaining Natural Habitat patches (20–30%). The SE and 5 km TL do not overlap legally protected or internationally recognized areas. Priority biodiversity values include Bolitoglossa morio (VU; nationally Cat 2–Endangered), Abronia vasconcelosii (VU; nationally Cat 2–Endangered), and the migratory Townsend’s Warbler (Setophaga townsendi); however, the Critical Habitat assessment concludes that none of the species present meet IFC PS6 Critical Habitat thresholds.
Atlantico Morales is situated in the Central American Atlantic moist forests (0–160 masl), largely within Modified Habitat (>90%) with limited Natural Habitat (<10%), including small forests and wetlands. The SE and the TL do not overlap legally protected areas, and while two protected areas occur within 1 km (Montana Chiclera Regional Municipal Park and Cuevas de Silvino National Park), no impacts are expected. The project overlaps the Guatemalan Caribbean Slope Key Biodiversity Area (KBA) and Important Bird Area (IBA); accordingly, per ESAP #11, fort Atlantico, Transnova will consult with the KBA sponsor, affected communities, and other relevant stakeholders and implement an additional conservation action proportional to project risk in line with IFC PS6. While two threatened flora species trigger IFC PS6 Critical Habitat thresholds at a broader assessment scale, residual project impacts are localized and minimal (including ~2.0 ha of Natural Habitat loss within an area of influence >2,500 ha), and are not considered significant under IFC PS6 considering that Transnova will implement avoidance, minimization, and rehabilitation measures.
Any future IFC financed subprojects proposed by Transnova will be screened and managed in accordance with the BMP, including Critical Habitat screening, stakeholder consultation where relevant, and application of IFC PS6 requirements.
PS8: Cultural Heritage
Transnova has implements systematic procedures to identify, assess, and manage cultural heritage risks in accordance with IFC PS8 and national regulations. Project design and execution are supported by qualified professionals using defined archaeological methodologies that include review of official registries, field verification, and technical viability assessments prior to construction. Robust Chance Find Procedures are in place and integrated into the ESMS, defining clear roles, classification of finds, notification to authorities, documentation, and work stoppage requirements, consistent with national law and international good practice. As part of ESAP #1, the ESRAMP will include a procedure to align its current practices with IFC PS8, including ensuring consultation with communities to protect cultural heritage and manage impacts, as needed.
No Cultural Heritage sites have been identified within the areas of influence of the two subprojects identified for IFC-financing (i.e. SJC and Atlantico), and residual risks, if any, are considered low and manageable.
