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
At the time of IFC’s appraisal visit in March 2025, the construction of the USP plant reached 70% completion.
Policy
USP has a Safety, Environment and Occupational Health Management Policy, which generally covers Environmental, Health and Safety (EHS) aspects. As per ESAP#1a, USP will upgrade its existing Policy to a more comprehensive Environmental, Health, Safety and Social (EHSS) Policy aligned with the IFC Performance Standards (PSs), including anti-harassment, protection of human rights for direct and indirect employees, stakeholder engagement and biodiversity conservation. As per ESAP#1b, USH will develop an EHSS Policy aligned with the IFC Performance Standards (PSs).
Identification of Risks and Impacts
The Ministry of Environment and Climate Affairs assigned to the Sohar Port and Freezone (SPF) authority full responsibility for the processing and supervision of the issuance of environmental permits. In 2020, SPF issued an Environmental Permit Application Guidelines, which illustrates the requirements of the Environmental Impact Assessment (EIA) procedure. In line with the SPF Guidelines, an EIA in compliance with Omani law was prepared by USP and approved by SPF in August 2024, with environmental requirements and prescriptions. The Project site is located within the SPF area on land leased from the Omani Government, free of any previous occupants or other land users. Archaeological tombs and graves have been found within the SPF area allocated for the USP project. Before any construction was permitted, the Ministry of Heritage and Tourism applied suitable procedures and performed rescue excavation for the tombs and graves in line with PS8. Each tomb was assigned a unique serial number, cleaned from shrubs and any artifacts found in the burial chamber were retrieved and documented, and photographs taken of the tombs prior to the removal.
As per ESAP#2, USP will prepare an Environmental and Social Impact Assessment (ESIA) addendum, focusing on the identification of area of influence and associated facilities, identification and assessment of the impacts on biodiversity, identification of the communities and stakeholder engagement planning, description of the production process and of the mitigation measures for air emissions and solid/liquid effluents.
ESMS and Management Programs
USP has an ESMS covering EHS and OHS aspects during the construction phase, developed in compliance with Omani Law and SPF permitting conditions. As per ESAP#3, #4, and #5, the Company will prepare a more robust ESMS Framework for operations, including a number of key E&S Management Plans as outlined in the ESAP and in the subsequent paragraphs.
Organizational Capacity and Competency
USP has a Health, Safety and Environment (HSE) department responsible for the supervision and management of the Company’s work safety. The HSE department is led by the HSE Vice President, and its operations are coordinated by the HSE Manager, supported by dedicated teams for HSE compliance management at each plant department. The Company has also created a Safety Production Committee led by Senior Management representatives, in charge of making strategic decisions and evaluating the Company HSE performance, including the identification and implementation of corrective actions. As per ESAP#6, the Company will hire an E&S Manager / Lead, reporting to senior management, to oversee the implementation of the EHSS Policy and of the operations ESMS, including compliance with IFC PSs and ESAP completion. The new E&S Lead will also be responsible for overseeing sustainability initiatives across the company operations with a focus on resource efficiency, waste reduction and greenhouse gas (GHG) emissions, as well as sustainability reporting. Additionally, as per ESAP#7, USP will strengthen its EHSS team by hiring a Senior OHS Specialist and a Senior Supply Chain Specialist, both familiar with the IFC PSs.
Emergency Preparedness and Response
SPF has implemented an Emergency Response Plan (ERP) to ensure the provision of a prepared response to an emergency situation within the Port and Freezone area. SPF emergency response is available 24/7 and is in direct contact with the Civil Defense Department (CDD). Every tenant, including USP, is responsible for preparing their own Emergency Preparedness and Response Plan (EPRP) aligned with SPF ERP and for activating the emergency procedures based on incident tiering. In case of incidents, the tenant immediately informs SPF, which informs the CDD. USP’s EPRP provisions for construction are generally aligned with the IFC PSs. As per ESAP#3, USP will prepare an updated EPRP for operations aligned with the IFC PSs and with the SPF ERP, taking into consideration all key emergency scenarios for production processes, such as release of liquid/gaseous hazardous and toxic materials, fire, explosion, etc..
Monitoring and Review
During construction, USP has implemented monitoring procedures for safety management. There is an inspection team within the HSE Department, which is responsible for performing weekly inspections at the construction site. USP’s senior management performs quarterly site inspections. Every quarter the Company must submit an environmental performance report to SFZ, which itself performs inspections at least twice a year for high-risk projects like USP. As per ESAP#5, USP will prepare an Environmental and Social Monitoring Plan for operations aligned with the IFC PSs and applicable World Bank Group (WBG) EHS Guidelines. Every year, as per ESAP#8, USP will hire a third-party specialized consultancy to perform a process safety and EHS/OHS audit, including implementation of the associated corrective actions, if any.
Supply Chain Management
The primary raw materials used in the USP production process are chlorosilanes and MG-Si. Chlorosilanes will be sourced from a chlor-alkaline company located 300 km south of Sohar, while MG-Si will be purchased mainly from Malaysia, using quartzite and charcoal as input. USP has a Supply Chain Management System (SCMS) which includes (i) traceability of its primary suppliers up to raw material sourcing; (ii) supplier agreement contractual clauses covering labor, safety standards, anti-sanction and anti-forced labor provisions, sub-supplier management and auditing requirements; and (iii) supplier evaluation procedures. As per ESAP#9, USP will strengthen its SCMS documentation and procedures to align them with IFC PSs requirements for supply chain under PS1, PS2 and PS6, including a Supplier Code of Conduct, clauses and covenants in Supply Agreements, procedures for supply chain mapping and traceability and for supply chain risk assessment and risk rating, communication, monitoring and reporting systems. After one year of plant operations, as per ESAP#10, USP will complete a Supply Chain Risk Assessment and Risk Rating for all its primary suppliers.
PS2: Labor and Working Conditions
As of March 2025, the Company employed 977 direct employees of which 89% are men and 11% women, and 9 agency workers. The largest groups of direct employees comes from Bangladesh, China, Oman and Pakistan. Construction is undertaken by EPC contractors with a total of 5,231 workers, mostly coming from Bangladesh, China and Pakistan. After production commences, USP will have a total workforce of 1,505 employees, of which 1,116 in-house employees and 389 agency employees.
Human Resources Policies and Procedures, Working Conditions and Terms of Employment, Workers' Organization
UPS has adopted corporate HR policy and procedures developed as per national law requirements and generally in line with IFC PS2. The Employee Handbook covers aspects such as hiring, working conditions and terms of employment, and dismissals, as well as a Code of Conduct. As per ESAP#11, USP will revise the Employee Handbook to explicitly state prohibition of child labor and forced labor. As part of its HR policy and procedures, the Company will include provisions for non-discrimination and equal opportunity, anti-harassment, protection of human rights for direct and indirect employees, workers’ organization, and retrenchment. USP will also formalize its worker management relationship, demonstrating its commitment to workers' right to organize and collective bargaining. During operations only a fraction of USP employees is expected to be foreign individuals. As per ESAP#4, USP will develop and implement a Human Resources Management Plan for Migrant Workers, ensuring adherence to labor laws, immigration regulations and employment rights, preventing exploitation and promoting hiring practices in line with IFC PS. USP is committed to enhancing the hiring of a local workforce during operations and expects to gradually increase the local hires in the future after operation starts. As per March 2025, the percentage of Omani workers stand at 22%, as all EPC contractors are Chin ese companies with a predominance of Chinese workers. To support its efforts of reaching the higher local hire target, as per ESAP#12, USP will develop and implement a Local Content Management Plan, defining the Company strategy for local hire and the plan for developing competences and skills.
Grievance Mechanism
As per ESAP#13, the Company will develop and implement a grievance mechanism (GM) for workers, to enable anonymous complaint submission, and disseminate it among all direct, contracted, and third-party workers. The GM will include provision for reporting gender-based violence and harassment (GBVH). The HR department will conduct GM-related training and awareness campaigns for workers. The company will extend the GM to third-party workers.
Occupational Health and Safety
Potential OHS risk and impacts include workers’ exposure to noise, heat, dust, potential chemical leaks, as well as risks related to construction works (structural, electrical, and mechanical), vehicular traffic, and contingencies (gas threats, fire and biological hazards). The Company has in place HSE policies and procedures. The company has established a series of control measures and management procedures for high-risk operations during construction. On-site accidents statistics for the construction show minor injury accidents only, resulting in Lost Time Injury Frequency Rate (LTIFR) below industry benchmark, although this might be related to under-reporting and sub-optimal management of sub-contractors. As per ESAP#3, USP will develop and implement an OHS Management Plan for operations aligned with IFC PS2, WBG EHS Guidelines, national regulatory requirements and Good International Industrial Practices (GIIP). As part of this plan, the Company will develop and implement a system to collect statistics on OHS in compliance with national regulations and PS2 and will use international benchmark for the chemical manufacturing sector to set Key Performance Indicators (KPIs) for LTIFR and other parameters including near misses. As part of the ESMS, the Company will reinforce the OHS training for all workers and supervisory staff. Internal OHS inspections are undertaken regularly by the Company HSE team. As per ESAP#7, the USP team will be strengthened with additional resources to ensure implementation of robust OHS procedures. The Air Quality Management Plan (ESAP#4) will indicate the requirements and technical specifications related to periodic indoor and outdoor measurement campaigns within the plant area. As per ESAP#5, the monitoring requirements for workers' exposure to noise and heat will be specified in the related management plans and in the E&S Monitoring Plan. As per ESAP#8, a third-party process safety/EHS/OHS audit will be undertaken on an annual basis, and the Company will implement the associated corrective action plans, if any. For medical emergencies, the company has established a medical clinic on site and has an ambulance readily available in case of transfer to public health facilities. On site medical personnel include a trained doctor and nurse.
Workers Engaged by Third Parties
Construction of the polysilicon manufacturing plant is being carried out by third-party contractors with migrant labor from China and South Asia accommodated in a workers camp adjacent to the construction site, generally aligned with IFCPSs, or in nearby residential areas. The company HSE team provides oversight of the EHSS performance of contractors, although formal supervision practices need to be reinforced. During operations, the Company plans to engage 389 of its employees through third parties (recruitment agency). As per ESAP#3, USP will develop a Contractor Management Plan (CMP), which will specify the requirements for EHSS management of contractors, subcontractors, and third parties. The CMP will outline the process of incorporating project EHSS requirements into contractors’ and subcontractors’ responsibilities, as well as the process of selecting, hiring, managing, and monitoring them. Contractors will be required to adhere to the USP code of conduct, comply with IFC PS2 and national labor laws, and establish a grievance mechanism (GM) for contractor workers. The contractors’ ESMS shall be approved by the Company prior to mobilization of contractor workers on site. This includes workers’ accommodation in line with IFC’s Guidance Note on Worker’s Accommodation: Processes and Standards.
PS3: Resource Efficiency and Pollution Prevention
Resource Efficiency and Greenhouse Gas Emissions
Electricity is to be sourced from the national grid through Nama Electricity Supply Company, with operational office within SPF. In operation, the total electricity consumption of the USP plant will be around 5,500 GWh/year. At full capacity, the energy intensity of the plant is estimated to be initially around 55 MWh/ton, to be reduced to 52 MWh/ton after one to two years of operation, thanks to continuous energy efficiency improvements. The production process adopts innovative reduction furnaces to reduce direct power consumption in the CVD process, a high-efficiency distillation recovery system to minimize material and energy consumption, an optimized heat exchange network system and other advanced technologies such as energy-efficient dry transformers. For Company vehicles, diesel consumptions will be 58,500 l/year. After the production plant becomes operational, the annual GHG emissions are expected to be approximately 2,996,000 tons CO2eq/year. As per ESAP#14, USP will quantify its direct emissions from the facilities owned or controlled within the physical project boundary (Scope 1) and indirect emissions associated with the off-site production of energy used by the project (Scope 2). Quantification of GHG emissions will be conducted annually, using internationally recognized methodologies. The water used by USP, estimated to be 28,000 m3/day, will be supplied by Majis Industrial Services from a seawater desalination plant serving the SPF tenants. The majority of the daily water consumption is used as make-up water for the plant’s circulating cooling water system. This water functions primarily to remove process heat, which is transferred into the circulating water and dissipated from the system through evaporation. The evaporation rate is high (940 m3/h) due to the hot local climate and the use of open cooling towers.
Wastewater
All wastewater generated by the Project will be treated through domestic sewage treatment stations, wastewater treatment facilities, acidic wastewater treatment systems, concentrated water recycling systems, and high-salinity wastewater treatment systems, achieving full reuse and zero wastewater discharge. The Project will generate sanitary and process wastewater which will be treated onsite. Sanitary wastewater, estimated to be 30m3/day, will go through standard sanitary wastewater treatment processes of physical/chemical treatment, biological treatment, and sludge settlement. The effluent will be used for onsite greenbelts in compliance with Omani regulations. Process wastewater will be composed of air emission scrubbing wastewater, reactor bottoms from cold hydrogenation and distillation (chlorosilanes and chlorides of metal impurities), HF/HNO3 rinsing wastewater, general process cleaning wastewater. The process wastewater treatment includes screening/grit removal, neutralization, coagulation/flocculation, sedimentation, primary sludge removal, ultrafiltration and reverse osmosis (RO). The treated clean water from RO, estimated to be 220 m³/h, is recycled in the production process as circulating water. The concentrated wastewater of RO reject is sent to multiple step evaporation system to evaporate all water for recycling and generate industrial solid or hazardous wastes. As per ESAP#5, USP will prepare a Water Management Plan for operation, aligned with the WBG General EHS Guidelines and the IFC PSs.
Air Emissions
During construction, the primary emissions in atmosphere are dust and particulate matter. These are addressed by USP and their contractors through mitigation measures such as dust suppression, management of vehicle loads and speeds. During operation, the air emissions are from batch reactions of CVD units, cold hydrogenation, and acid washing of products. After each batch reaction, the CVD chambers are purged using nitrogen gas. The purged gas, which contains gas-phase HCl, SiCl4, SiH2Cl2, SiHCl3 and others, is scrubbed by water which is then sent to the wastewater treatment plant. In addition, the MG-Si grinding and melting process (associated facility) generates silicon dust which will be captured and collected via negative pressure ducts and discharged to dust removal systems (cyclone separators and dust bag house) capable of separating almost 100% of the generated dust from air. The purified air from inside the baghouses is discharged through a 15-meter exhaust stack, maintaining a particulate matter (PM) concentration < 10 mg/m3.
Since the Omani regulations do not include emission criteria specific to the polysilicon industry, provisional emission limits have been established by SPF for particulate matter, NO2, HCl and HF. As per ESAP #4, USP will prepare an Air Quality Management Plan, including frequency and technical specifications for periodic monitoring campaigns, aligned with the WBG General EHS Guidelines and with the EHS Guidelines for Large Volume Inorganic Chemical Manufacturing.
Process Safety and Hazardous Materials Management
The main hazardous materials stored onsite are one hydrogen tank with 100 m3 capacity at 15 bar, twelve SiHCl3 tanks, limited volumes of HF and HNO3, for occasional use in acid-washing silicon material that has fallen to the ground, and caustic soda solution (NaOH) for wastewater neutralization. The MG-Si will be prepared onsite by grinding into silicon fine dust. The process, encompassing raw material feeding, crushing screening, grinding, melting, casting and cooling will occur in enclosed environments connected to bag house dust collector systems and capable of capturing and recycling almost 100% of generated silicon dust. The raw fine silicon will be stored in tie bulk bags to prevent silicon dust from flying during transportation and storage. As per ESAP #3, the Company will prepare a Hazardous Materials Management Plan, covering also the silicon grinding plant, aligned with the WBG EHS Guidelines.
For process safety management, USP has prepared a hazard and operability study (HAZOP), Safety integrity level (SIL) Classification study and a Quantitative Risk Assessment (QRA). The fire, explosion, and toxicity credible scenario results comply with the standard requirements, as well as building anti-blast, thermal radiation and toxic protection assessment results. Personnel risk exposure levels comply with regulatory requirements, while communities are located far from the USP plant area. As per ESAP #15, will prepare and implement an alarm management guideline in line with internationally recognized standards and guidelines, including identification and monitoring of KPIs. As per ESAP#16, to enhance functional safety management USP will prepare Safety Requirement Specifications, Functional Safety Management Plan, Audits and Assessment in alignment with GIIP. As there is no community near the industrial park, the process safety management actions will be relevant for onsite OHS and emergency response purposes. As per ESAP#3, USP will prepare a Process Safety Management Plan for operations, aligned with the IFC PSs, including system completion and start up. The plan will include provisions for functional safety management, competency assessments, functional safety audits, functional safety assessment, safety requirement specifications.
Noise
In accordance with the Omani regulations and IFC PSs, USP has established that the noise level in daily work environment where workers are directly exposed must not exceed 85 dB(A). If workplace noise exceeds 85 dB(A), employees must wear appropriate noise protection equipment. As per ESAP#5, USP will prepare a Noise Management Plan aligned with WBG EHS Guidelines. The plan will include specifics on ambient noise monitoring to be carried out inside the plant in line with local legislation requirements and IFC PSs. The measured values will be evaluated for compliance with the applicable ambient noise levels indicated by the WBG General EHS Guidelines.
Hazardous and Non-Hazardous Wastes
It is recognized that this Project includes various hazardous chemicals, byproducts and waste. The main hazardous byproducts/waste of SiH2Cl2 and SiCl4 are converted to SiHCl3 within the production process, therefore the USP project will not generate chlorosilane waste. The conversion process is based on the use of resins procured by USP and subject to third-party testing to ensure high quality standards and safety. The main solid/hazardous waste generated by the USP plant include sanitary wastewater treatment sludge (200 kg/day), solid residues from process wastewater treatment (40 tons/day with approximately 50% moisture content, corresponding to an actual dry weight of ~20 tons/day), evaporation wastes (14 tons/day) and used resins (replaced every few years). The sludge and wastes will be analyzed by a third-party company according to toxicity characteristics leaching procedure (TCLP) to determine whether they are hazardous or solid waste. Based on such analyses, sludge/wastes are sent to Be’ah (https://beah.om), an Omani licensed waste management company with operations within SPF, for treatment and/or disposal or recycle. As per ESAP #3, the Company will prepare a Solid and Hazardous Waste Management Plan aligned with the WBG EHS Guidelines.
PS4: Community Health, Safety and Security
The polysilicon manufacturing plant is constructed within the SPF area, characterized by industrial complex land use and with no residential settlements. The nearby Sohar Port will be the main logistic hub for goods movements to and from the USP plant. Trichlorosilane, as input material for the USP plant, will be transported by trucks from a chlor-alkaline company located 300 km south of Sohar. As per ESAP#17, the Company will develop and implement a Community Health and Safety Plan aligned with the WBG EHS Guidelines. The nearest residential settlements are located approximately five km from the USP plant. The Company workforce is accommodated in rented apartment buildings in residential areas of Sohar and there will be no accommodation on site during operations. Accommodation provided by USP for its direct workers is aligned with PS2, and requirements will be put in place for third-party accommodation to be aligned with IFC’s Guidance Note on Worker’s Accommodation: Processes and Standards. Third-party contractors are expected to manage the transport of goods, raw materials and products to and from the project site. All third-party contractors will comply with relevant E&S conditions included in their contracts. Moreover, as per ESAP#18, the Company will include measures to manage traffic-related impacts in a Traffic Management Plan aligned with the WBG EHS Guidelines, with particular focus on in-country transportation of trichlorosilane and related emergency response requirements. Unarmed security personnel are hired for the construction and operation of the polysilicon manufacturing plant. As per ESAP#17, the Company will prepare a Security Management Plan, defining security rules, procedures, as well as roles and responsibilities. Regular training will be conducted by the Company for the security workers and guards on the implementation of the security rules. The external grievance mechanism prepared by USP will allow neighboring communities to express any concerns about the security arrangements and acts of security personnel. The plan will be aligned with IFC’s Good Practice Handbook on the Use of Security Forces; Assessing and Managing Risks and Impacts. The security personnel will be regularly trained on GBVH and the Code of Conduct.
PS6: Biodiversity Conservation and Sustainable Management of Living Natural Resources
Supply Chain
USP sources metallurgical grade silicon, which requires certain amounts of charcoal as raw material input for silica conversion to MG-Si. Charcoal may come from regions, such as Malaysia and Brazil, where there have been recent habitat conversion and there is continued risk of deforestation. To address the risk of deforestation/habitat conversion in areas of charcoal production in a manner commensurate to its leverage and influence over suppliers and sub-suppliers, USP will (i) prepare a five-years roadmap for the use of verified or certified charcoal in the process; (ii) require its suppliers to adopt biodiversity policies in line with PS6 supply chain requirements (ESAP#19).
