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 E&S Risks and Impacts
Environmental and Social Policies: Company has developed an overarching Sustainability Policy Framework (SPF) outlining commitments across environmental, social, and governance dimensions, addressing climate action, resource efficiency, biodiversity protection, energy security, safe work practices, employee well-being, and is aligned with international frameworks such as IFC Performance Standards, GRI, SASB, ADB ESF, UNGC, and the SDGs. The Company will formally endorse the SPF at the senior management level and communicate the policies to all the stakeholders. Company will define EHS KPIs for SRPL and Undefined UOP projects targeted by IFC UOP prior to start of construction aligned with the ESMP and IFC PS and develop an implementation plan for achieving these KPIs. (ESAP #1)
Identification of Risks and Impacts: Project-level environmental and social (E&S) documentation such as IEEs/EIAs that generally complies with national regulatory requirements guide the E&S risk identification. The Company does not yet have a fully structured, portfolio-wide procedure for systematically identifying, assessing, and evaluating environmental and social (E&S) risks. The Sustainability Policy Framework (SPF) lacks a standardized methodology for early-stage E&S risk screening and does not clearly link screening results to requirements for project-level studies or regulatory approvals or early-stage project planning. As a part of its corporate ESMS, the company will prepare a risk screening framework aligned to IFC PS that will guide the screening of project for the future Undefined UOP and integrate the screening outputs into early-stage project planning and project level studies including ESIA. The Company will conduct IFC aligned ESIAs for the projects targeted for IFC UOP. The IFC compliant ESIA shall be prerequisite for Undefined UOP projects. (ESAP#1)
The external TL lines for the assets are designed and constructed by CEB specifically for the project but are funded by the company. However, the company is not seen to be engaging with CEB on the alignment and integration of screening, selection, and mitigation measures, which may result in third-party risk. The company will engage with CEB proactively on screening and selection of TL alignment, its ESIA and ESMP scoping, and integration of mitigation measures such as BFD installation if applicable for the future Undefined UOP projects targeted by IFC UOP. (ESAP# 1))
For the 100 MW Solar SRPL Project, the company has prepared an updated ESIA, a Consolidated ESMP, and an Abbreviated Resettlement Plan (ARP) addressing economic displacement. The gap assessment identified in the ESDD highlighted that while the project met key regulatory and IFC PS requirements, additional measures are needed for full IFC PS alignment—such as species-specific biodiversity management, improved livelihood restoration provisions, clearer grievance redress processes for workers, and enhanced monitoring of E&S actions. The Company will address the gaps by implementing the corrective action plan stipulated in the third party ESDD report. (ESAP #1). The project will secure required legal and regulatory permits prior to commencement of the project, ensuring compliance with national and local environmental and social standards. Relevant documentation will be maintained and made available for verification. (ESAP #2).
E&S Management System and Programs: While the system and onsite practices demonstrate compliance capacity, gaps remain in aligning the framework with IFC Performance Standards. Specifically, there is no fully integrated corporate Environmental and Social Management System (ESMS) applied consistently across all projects, limited consolidation of biodiversity and ecosystem services considerations within risk assessments, and incomplete integration of stakeholder engagement, livelihood restoration, grievance redress tracking, and gender-based violence/harassment (GBVH) prevention measures. Clearer role definitions, budget allocations, and monitoring provisions are needed for effective lifecycle risk management. The Company is processing of developing the corporate ESMS and has drafted the sustainability policy and framework as a part of its disclosure requirement being top 100 listed company in Sri Lanka. The corporate ESMS will be applicable to the projects where the company has management control. The Company will develop and operationalize the corporate ESMS from project lifecycle perspective that will also guide the E&S risk management of Undefined UOP projects (ESAP#1). For joint venture projects where partners have functional implementation roles (e.g., the 100 MW Solar SRPL Project, a 50:50 partnership between Windforce and Lakhdhanvi), the Company will establish a project-specific ESMS aligned with IFC PS. This ESMS will be based on the ESIA, ESMP, and related studies, and will include construction and operational procedures applicable to all stakeholders, including JV partners and EPC contractors (ESAP #1). Company will formally cascade down the E&S requirements to EPC and O&M contractors and ensure its implementation by contractors in accordance with IFC Performance Standards and applicable WBG EHS Guidelines.
Organization structure: During the development stage of projects, the Chief Development Officer and the assigned Project Manager are responsible for overseeing the completion of E&S studies and securing required regulatory clearances in accordance with national legislation and lender requirements. Under the current institutional arrangement, primary responsibilities for E&S management rest with the individual project SPVs, which implement site-specific E&S measures. Corporate management exercises oversight through the relevant sector head. IFC appraisal showed no dedicated EHS resources deployed at the site. The SRPL project has appointed an E&S resource as a part of its contractual obligation under the PPP agreement.
The Company is in the process of strengthening its organizational capacity for E&S management at the corporate level through the establishment of a dedicated sustainability function. As per the SPF document, the future structure will be led by a Chief Sustainability Officer, supported by the recently appointed Sustainability Lead Engineer.
The Company will establish a corporate level organization capacity for E&S risk management to drive the development and implementation of corporate ESMS. For the projects with IFC UOP, the company will deploy dedicated EHS resource for implementation of ESMS, ESMP and ESAP during the preparation, construction and operation phase of the projects and ensure compliance with IFC PS and applicable WBG EHS Guidelines. Company will ensure that contractors also appoint competent onsite HSE teams consistent with ESMP requirements. (ESAP#3).
Monitoring and Review: Company has established certain elements of E&S monitoring and review within its SPF and site-level management plans, but these are not yet fully operationalized or consistently applied across its portfolio. While the structure for site-specific monitoring and reporting exists on paper – including commitments under IEE/ESIA approvals – implementation has been uneven, with mandated Environmental Monitoring Plans absent for some operational assets. There is no defined internal E&S audit program, nor a centralized legal and permit compliance register with structured site-level tracking. There is currently no corporate-level, consolidated system to track key E&S performance indicators—such as incidents, near-misses, training hours, resource consumption, waste generation, local employment, and grievances—nor a formal process for senior management to periodically review aggregated performance data and assess the effectiveness of the ESMS. As a part of corporate ESMS and project specific ESMS, the Company will develop and implement a corporate-level E&S monitoring and review system – including operationalizing site-level monitoring plans (specifically for IFC UOP projects), developing and tracking portfolio-wide KPIs, establishing regular performance reviews by senior management, introducing structured compliance tracking, and conducting both internal and external audit (ESAP#1). As a part of corporate ESMS, the Company will establish legal E&S register and tracker to monitor compliance with the E&S conditions in permit/clearance under Applicable Laws and ensure its application for the projects targeted by IFC UOP. (ESAP #2)
PS2: Labor and Working Conditions
Human Resource Policies and Procedure: Windforce has an HR Manual that covers a range of employee-related policies including general employment, recruitment and promotion, training and development, grievance handling, whistleblower protection, discipline, non-discrimination and equal opportunity, anti-bullying, occupational safety and health, leave and attendance, collective bargaining, termination, and other employee affairs. These policies are primarily applicable to direct employees, with some (e.g., equal opportunity and anti-bullying) extended to contract and third-party workers. The manual includes a prohibition on child labour aligned with Sri Lankan law but lacks a defined policy prohibiting forced labour across operations and the supply chain. The Company will need to update the HR policies and procedure to aligned it with IFC PS integrating forced labor safeguards, establishing GRM for all worker categories including contract workers, conducting periodic compliance audits to ensure regulatory alignment for the projects targeted by IFC UOP.
The company will need to periodically review and update its Human Resources policies and procedures to ensure they remain current, effective, and compliant with applicable laws and standards and IFC PS for the projects targeted by IFC UOP. All updated policies should be formally endorsed by the Senior Management and/or Board of Directors and will be promptly communicated to all employees through official channels, ensuring full accessibility via both physical and digital platforms.
Working Conditions and Terms of Employment: Windforce’s workforce comprise of 206 staff, including 21 women, with notable gender inclusion at one solar plant fully operated by six women. All operational staff are on-roll, with only security services outsourced. The company operates with flexible shift rosters across its assets, following 8- or 15-day work/off cycles, and ensures monthly working hours remain within 180 hours through rosters prepared in consultation with workers. While a standardized company-wide policy on working hours, overtime, and overtime pay is not yet in place, this presents an opportunity to harmonize practices across all sites in alignment with national labor regulations and international standards. Windforce will formalize a unified working hours and overtime policy, align HR practices with labor law and IFC PS2. In addition, the company will strengthen contractor management through structured monitoring and verification mechanisms, supported by annual labor law compliance audits and timely implementation of corrective actions. (ESAP #4) The labor and legal compliance audit will be part of annual ESMS audit. (ESAP # 1 )
Grievance Redressal Mechanism: The Company’s HR Manual includes a defined grievance redress mechanism (GRM) for direct employees, outlining steps to receive, acknowledge, verify, resolve, and close grievances, with confidentiality provisions, protection against retaliation, and handling procedures for sensitive issues such as GBV. However, there is no structured GRM for indirect, contract, or third-party workers in either the HR Manual or Contractor Management Plan. In practice, employees and contract workers often raise issues verbally to supervisors or contractor representatives, and formal awareness of the GRM process at site level is low. It recommended extending the GRM to cover all worker categories, including off-roll and contracted workers with clearly defined procedures for formal/verbal/anonymous complaints, proper recording, escalation pathways, timelines, and feedback to complainants; ensuring disclosure of GRM policy at sites in local languages; and maintaining standardized grievance registers and reports in line with IFC PS2. (ESAP#4)
The HR manual embed principles of equal opportunity, non-discrimination, and prevention of sexual harassment. It strictly prohibits discrimination, sexual harassment, and workplace bullying, clearly defining these behaviors and outlining disciplinary measures, including dismissal, for violations. It encourages employees to report incidents without fear of retaliation, with complaints handled confidentially and professionally. The Company will adopt and implement the dedicated comprehensive Anti-Sexual Harassment Policy applicable to all workers and third parties that include code of conduct addressing GBVH/SEAH, training programs including specialized training to designated persons responsible for receiving and investigating complaints, and effective grievance mechanisms with multiple confidential reporting channels, prompt impartial investigations, protection against retaliation, and proportional corrective actions are implemented in line with IFC Performance Standards. (ESAP #4)
Freedom of Association: Windforce’s HR Manual includes a Collective Bargaining Policy that recognizes employees’ rights to organize and participate in collective bargaining. While there is currently no workers’ union within the company, WindForce does not discourage employees from exercising their right to freedom of association.
Occupational Health and Safety: Occupational Health and Safety (OHS) policy is embedded in the Company’s HR Manual committing to providing a safe and healthy work environment, fostering a safety culture, raising awareness, and minimizing occupational accidents and diseases. The policy emphasizes accident and injury prevention through hazard minimization, safe work practices, emergency preparedness, and compliance with legal requirements and includes accident reporting. While core safety measures are in place at the operational sites as evident from the third party ESDD, gaps remain in areas such as occupational health surveillance and consistent site-level communication of standardized OHS policies and procedures. Company does not yet have a standardized portfolio wide system for tracking, analyzing, and escalating incidents, near misses, or other occupational and environmental events. While site level incident reporting procedures exist as part of project-specific EHS frameworks and regulatory approvals, these are applied inconsistently across assets, with no consolidated KPI framework to capture incident rates, trends, or corrective actions at the corporate level. Senior management does not currently receive periodic, aggregated incident performance data, limiting the ability to systematically review the effectiveness of E&S controls and drive continuous improvement. Establishing a unified incident monitoring and reporting system — integrated into the broader ESMS, supported by corporate KPIs, and linked to lessons learned processes — would strengthen compliance, risk management, and alignment with IFC Performance Standards. To operationalize the OHS policy in line with IFC PS2 and WBG EHS Guidelines, the company will integrate a formal Occupational Health and Safety Management System (OHSMS) based on recognized standards (such as ISO 45001). This should include hazard identification and risk assessment with documented results, setting measurable safety performance indicators, and establishing regular training tailored to specific job risks. Emergency preparedness plans should be developed and tested periodically, with resources and responsibilities clearly assigned. Systems for incident investigation, root cause analysis, contractor management, worker’s engagement in safety programs, implementation of corrective and preventive actions and reporting OHS performance to management and stakeholders need to be formally instituted. (ESAP#1) This is expected to strengthen compliance, align with IFC and WBG requirements, and drive continuous improvement in workplace safety.
Supply Chain: The Company’s supply chain includes procurement of solar panels and wind turbines for its renewable energy projects. For planned BESS developments, the supply chain is expected to include large-scale battery units and associated components. At present, the Company does not have a formal Supply Chain Management System (SCMS) in place to assess and manage E&S risks within its procurement activities. The IFC review of shortlisted solar suppliers for the proposed 100 MW Solar SRPL Project does not reveal the presence of suppliers associated with high E&S risk, particularly in relation to labor practices and raw material sourcing. The third party, ESDD, categorizes the shortlisted suppliers in low to moderate risk category.
As a part of corporate ESMS, the Company will establish a Supply Chain Management System (SCMS) which will include supplier code of conduct and procedures for supply chain E&S risk screening, due diligence, and monitoring (ESAP #5). The SCMS will also guide supply chain risk management for Undefined UOP projects, ensuring that procurement from suppliers is subject to due diligence and alignment with IFC PS2. As a part of its SCMS, the company will engage with its current suppliers to sign off on the SCMS and agree to periodic reporting and audit.
PS3: Resource Efficiency and Pollution Prevention: The resource efficiency and pollution prevention practices have been uneven across the portfolio, with instances of inadequate waste segregation and disposal controls observed at certain sites, and the absence of consolidated monitoring of resource consumption indicators such as energy use, water use, and waste generation. To strengthen its PS3 performance, as part of its corporate and project specific ESMS, the Company will require operationalizing site-level Environmental Monitoring Plans, developing portfolio-wide KPIs for resource use, emissions, and waste management, instituting regular corporate review and escalation of performance data, and ensuring corrective actions are applied consistently.
From a project-specific perspective, construction and operations activities of the projects targeted by IFC UOP are expected to generate waste streams such as construction debris, used oils, and electronic waste. These will be managed by the respective contractors in accordance with the project-specific ESMP. The company will adhere to project-specific ESMPs and EHS manuals for the construction and operations of the IFC UOP projects, ensuring alignment with IFC PS3.
By supporting the generation of electricity from Solar PV, the project is expected to avoid approximately 141,564 tCO2e in greenhouse gas emissions each year.
PS4: Community Health, Safety, and Security
Infrastructure and Equity Design Safety: Current national regulations do not specify setback requirements for wind projects, and the company is yet to formulate its own policy on setback distances. While existing operational projects were developed in line with prevailing local standards, they differ from the setback guidance outlined in the World Bank Group (WBG) Environmental, Health and Safety (EHS) Guidelines for Wind Energy. The company has already established Standard Operating Procedures (SOPs) for planned preventive inspection and maintenance of wind turbines. Going forward, the company will commit to aligning with the setback distance requirements specified in the WBG EHS Guidelines for Wind Energy for projects targeted under the IFC UOP.
The construction ESMP will provide the mitigation measures to address potential community health and safety risk during construction such as site access hazards, traffic disruption, noise and vibrations, and dust emissions and company will adhere to the ESMP.
Security: The company uses unarmed private security personnel across its Sri Lanka renewable energy portfolio for asset protection, access control, and site safety. Security services are engaged at operational and construction sites, including the SRPL Project, and are integrated within site-level health, safety, and environmental management arrangements. The Company does not employ public security forces (police or military) or armed security for routine project activities. IFC appraisal review shows armed government security forces at one of the operational sites.
Security personnel operate under contractor management arrangements and are expected to comply with site rules, worker Codes of Conduct, and applicable grievance redress mechanisms. Community grievances related to safety, access, or conduct of project personnel (including security staff) are addressed through existing grievance mechanisms.
No incidents involving the use of force, security-related human rights abuses, or community harm have been reported across the portfolio. The Company is in the process of strengthening its corporate ESMS, which will further formalize procedures related to security management and security personnel in alignment with IFC Performance Standard 4 intended to strengthen documentation and consistency with IFC (ESAP#1). The company will train its security personnel on Gender Based Violence (GBVH), Sexual Exploitation, Abuse and Harassment (SEAH) and interaction with local community (ESAP#4).
PS5: Land Acquisition and Involuntary Resettlement
IFC review shows that the Company has identified impacts associated with 100 MW Solar SRPL Project and associated transmission infrastructure and has prepared an ‘Abbreviated Resettlement Plan’ (ARP) which is grounded in national regulations and policies including National Involuntary Resettlement Policy The solar park footprint (~543 Acres) is on State “residual forest” land that was previously under the Forest Conservation Department, later vested with the Divisional Secretary, and is now granted to SLSEA and leased to the Developer. The transmission line is planned to avoid houses and relies mainly on Right of Way/easement rather than outright acquisition. Predominantly the impacts identified include economic displacement of 80 non-title chena (traditional slash-and-burn farming on forestland) farmers due to solar park land use, plus RoW/easement-based impacts to 53 private landowners along the transmission line (tower footprints + crop/tree impacts), with no physical displacement.
The ARP defines Cut-off dates as 13 Aug 2021 (Divisional Secretary’s meeting) for 80 farmers and 2022 census for TL. For the 80 chena farmers (non-title users), the ARP includes land-based livelihood restoration through Government commitment to provide alternative State land (stated as 5 acres per farmer). For TL-affected landowners/users, entitlement provisions include: advance notice with time to harvest standing crops, crop compensation for unharvested crops, livelihood restoration allowance/special allowance, and extension support/inputs. Although, the ARP sets out PS-5–type mitigation measures (avoid physical displacement, compensate at replacement cost, land-based livelihood restoration for land-based livelihoods, cut-off dates, GRM), the ESIA and supplementary reports does not provide clarity on their material delivery or implementation which is required for PS-5 compliance.
The mitigation framework is directionally aligned, but PS-5 compliance will only be achieved if the Project demonstrates through documented evidence that alternative land (5 acres or an equivalent land-based package) is fully secured and handed over with secure tenure to all 80 farmers prior to access restriction/site clearance, and transitional support is provided where needed as per the ARP. With respect to TL, it is required to confirm that the compensation paid for all affected assets/users are full replacement cost, with documentation and if any top-up mechanism is required where Government rates fall short.
While the mitigation framework is generally aligned with the objectives of IFC Performance Standard 5, full compliance is contingent upon completion and documentation of key implementation measures till date, particularly the secure allocation and handover of alternative land to all affected non-title users and demonstration of full replacement cost compensation for all affected assets. The PS-5 impacts and risks can be managed through a comprehensive ARP implementation audit and implementing a supplementary Livelihood Support Program (LSP) for full compliance with PS-5 (ESAP#6) if needed. The Company level ESMS will include policies (Land Acquisition and RoW Policy) and procedures for screening PS-5 risks and impacts and are required to prepare mitigation plans (RAP/LSP) and implement them (ESAP #1). The corporate ESMS on land acquisition and ROW will guide the future Undefined UOP projects targeted through IFC UOP.
PS6: Biodiversity Conservation and Sustainable Management of Living Natural Resources
For the SRPL project, it is in eastern Sri Lanka within the Sri Lanka dry-zone dry evergreen forests which is dominated by forested landscapes which have been partially cleared for agriculture. The Project is within a modified landscape consisting of dryland agriculture and grazing. Based on critical habitat screening, there are currently no likely triggers for the Project. An Asian elephant population Elaphus maximus IUCN EN is known to occur within the landscape and hence an elephant proof fence has been installed along the perimeter of the Solar Project to restrict ingress of the species. Consultation with the Sri Lankan Department of Forest Conservation (DFC) indicates that additional fencing is placed to reduce impacts to crops in adjacent agricultural lands. To manage potential risks to elephant movements, the Project is to develop a Biodiversity Management Plan that includes monitoring protocol with DFC to document elephant movements in areas adjacent to the SRPL Project and measures to reduce human/wildlife conflicts within the vicinity of the project. (ESAP #7)
Regarding future projects as part of the investment, IFC PS1 is to apply, including applying requirements to comply with PS6 risks related to natural and critical habitats, including applying Good International Industry Practices (GIIP) to surveys and developing mitigation and monitoring strategies specific to sector risks in compliance with IFC PS and sector specific WBG Guidelines. (ESAP#1)
