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Environmental & Social Review Summary
Project Number
51639
Company Name
Bhutan Power Corporation Limited
Date ESRS Disclosed
Sep 7, 2026
Country
Bhutan
Region
South Asia
Last Updated Date
Sep 7, 2026
Environmental Category
B - Limited
Status
Pending Approval
Sector
Electric Power Transmission
Industry
Infrastructure
Department
Regional Industry - INF Asia & Pac
Project Description
IFC proposes to provide a debt investment of US$20 million to Bhutan Power Corporation (BPC). BPC is a state-owned company in Bhutan, responsible for the transmission and distribution of electricity across the country. It is wholly owned by Druk Holding and Investments Limited (‘DHI’), the investment arm of the Royal Government of Bhutan, which operates on commercial principles. The investment will be utilized for: (a) upgradation of Thimphu transmission system, including upgradation of 220/66kV Semtokha Air Insulated Substation (AIS) to Gas Insulated Substation (GIS); and (b) integration of upcoming solar power generation capacity including construction of 220/33kV Tenchekha Pooling Substation (PS).
The conversion of AIS to GIS at Semtokha is expected to happen concurrently with decommissioning of the existing transformer at the existing substation (SS) site. The GIS SS will be compact (18 X 21 sqmt) and therefore require limited space within existing SS premises. The conversion will involve replacement of transformers and associated equipment like circuit breakers, lightning arrestor, bus bar, control panel, relay panel and insulator. The current outgoing peak load is 128 MW, which during the conversion of the AIS to GIS will be managed through Bhutan Power System Operator, including the Load Dispatch Centre, in accordance with the power system contingency plan to ensure effective peak load management from the substation. The overall timeline for completion of the process is approximately six months and will involve two separate contractors: one for civil work and another for the GIS installation. The GIS supplier will be responsible for transporting the GIS from India via the Phuentsholing border and installing it at the site. The GIS configuration has been selected based on the load-bearing capacity of the roads along the transportation route. The typical service life of a transformer is approximately 30 years; as the existing transformer is around 18 years old, it will be relocated to another substation for continued use.
BPC is an existing client of IFC. Information on the existing investment through BPC Transmission # 48965, committed in Sep 2025 is available at HYPERLINK "https://disclosures.ifc.org/project-detail/SII/48965/bpc-transmission" https://disclosures.ifc.org/project-detail/SII/48965/bpc-transmission; and performance till date is satisfactory.
The conversion of AIS to GIS at Semtokha is expected to happen concurrently with decommissioning of the existing transformer at the existing substation (SS) site. The GIS SS will be compact (18 X 21 sqmt) and therefore require limited space within existing SS premises. The conversion will involve replacement of transformers and associated equipment like circuit breakers, lightning arrestor, bus bar, control panel, relay panel and insulator. The current outgoing peak load is 128 MW, which during the conversion of the AIS to GIS will be managed through Bhutan Power System Operator, including the Load Dispatch Centre, in accordance with the power system contingency plan to ensure effective peak load management from the substation. The overall timeline for completion of the process is approximately six months and will involve two separate contractors: one for civil work and another for the GIS installation. The GIS supplier will be responsible for transporting the GIS from India via the Phuentsholing border and installing it at the site. The GIS configuration has been selected based on the load-bearing capacity of the roads along the transportation route. The typical service life of a transformer is approximately 30 years; as the existing transformer is around 18 years old, it will be relocated to another substation for continued use.
BPC is an existing client of IFC. Information on the existing investment through BPC Transmission # 48965, committed in Sep 2025 is available at HYPERLINK "https://disclosures.ifc.org/project-detail/SII/48965/bpc-transmission" https://disclosures.ifc.org/project-detail/SII/48965/bpc-transmission; and performance till date is satisfactory.
Overview of IFC's Scope of Review
IFC’s review of the investment focused on identifying the environmental, health & safety, and social risks and impacts of the proposed project, assessing existing gaps against the requirements of the IFC Performance Standards (IFC PS), and identifying specific mitigation actions to ensure compliance with the IFC PS. IFC E&S review specifically involved visit to the existing substations at Semtokha and Dechencholing and to the Tenchekha area, where the Pooling Substation (PSS) is proposed. The site visit included discussions with key stakeholders, including the BPC project teams, site level operation and maintenance (O&M) teams and representatives from the local administration including the GUP (Head) of Kawang Gewog (Block) in Thimphu Dzongkha (District). IFC held appraisal meetings with the senior leadership and functional teams of BPC in Thimphu, involving representatives from Environment, GIS & Survey section, Transmission Department, Distribution Department including the Electricity Services Division (ESD) and Corporate Services Department.
E & S Project Categorization and Applicable Standard
While all Performance Standards are applicable to this investment, IFC’s environmental and social due diligence indicates that the investment will have impacts which must be managed in a manner consistent with the following Performance Standards
PS 1 - Assessment and Management of Environmental and Social Risks and Impacts
PS 2 - Labor and Working Conditions
PS 3 - Resource Efficiency and Pollution Prevention
PS 4 - Community Health, Safety and Security
PS 1 - Assessment and Management of Environmental and Social Risks and Impacts
PS 2 - Labor and Working Conditions
PS 3 - Resource Efficiency and Pollution Prevention
PS 4 - Community Health, Safety and Security
This is a Category B project as per IFC’s Policy on Environmental and Social Sustainability (2012) as the use of proceeds is limited to investments in assets that do not involve significant E&S risks. The key E&S issues include: a) existing E&S management system (ESMS) implementation for site selection, managing construction and operation impacts and adequacy of E&S risk assessment undertaken for identified projects, with appropriate consideration of the concurrent decommissioning of the existing transformer and the construction and installation of GIS at the Semtokha substation; b) assurance of fair, safe and healthy working conditions, contractor oversight and management, and gender based violence and harassment (GBVH) risks as per labor laws and IFC PS2; c) waste management (including hazardous wastes and e-wastes), management of transformers and equipment containing polychlorinated biphenyls (PCBs) and sulfur hexafluoride (SF6) management, in line with IFC EHS guidelines/GIIP; d) community health and safety (H&S) risks including traffic and transport safety, potential electromagnetic field (EMF) exposure, life and fire safety (L&FS) systems, emergency response and preparedness, stakeholder engagement and grievance mechanisms; and e) supply chain risks for procurement for equipment for infrastructure upgradation.
Environmental and Social Mitigation Measures
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:
Policy and Environmental and Social Management Systems. BPC has adopted an Environmental Policy, an Occupational Health and Safety Policy and an Integrated Management System (IMS) Policy, broadly aligned with the objectives of IFC’s Performance Standards. An Integrated Management System (IMS) has been implemented for BPC's overall business activities, certified according to ISO 9001:2015 (Quality Management), ISO 14001:2015 (Environmental Management), and ISO 45001:2018 (Occupational Health and Safety). The IMS applies to all aspects of BPC's operations, including the transmission and distribution of electricity, and is applicable to BPC headquarters and its 19 regional centers (Electricity Services Divisions).
As part of the ESAP, for the IFC’s previous investment (BPC Transmission # 48965), BPC augmented its IMS into an Environmental and Social Management System (ESMS), formalizing and updating the requirements for E&S procedures and plans in line with the regulatory framework, IFC PS requirements, relevant WBG EHS Guidelines and good international industry practices (GIIP). The ESMS was operationalized in April 2026. BPC will ensure the effective implementation of the ESMS requirements across the project.
Identification of Risks and Impacts and Management Programs. BPC identifies and manages E&S risks and impacts associated with its operations through compliance with applicable national standards and E&S regulatory permits and requirements. E&S risks are identified and assessed in accordance with the requirements of ISO 14001, ISO 45001, and BPC’s ESMS; BPC has established and maintains processes for identifying the E&S risks and impacts of its operations, consistent with GIIP and utilizing standard tools such as Hazard Identification and Risk Assessment (HIRA) and the Environmental Aspect and Impact (EAI) Matrix. Specific HIRA and EAI Matrices have been developed for BPC’s operations. Operational Control Procedures (OCPs) have been designed to address key safety, environmental, and operational risks across work sites, including hazards like work at height, confined spaces, electrical safety, and fire hazards. These SOPs also address environmental risks such as leakages and spillages, waste disposal, pollution, and land contamination.
As per ESAP#1, BPC will prepare a HIRA for (a) construction works associated with upgradation of the Semtokha substation, involving upgradation of 220/66kV Semtokha Air Insulated Substation (AIS) to Gas Insulated Substation (GIS), along with upgradation of the 220/66kV transformer; and for (b) decommissioning, demobilization and re-utilization of redundant equipment and structures, post substation and transformer upgradation at Semtokha. Accordingly, for the construction and installation of the GIS at Semtokha, BPC will develop and implement Construction Stage Environmental and Social Management Plan (C-ESMP), consistent with national laws and standards and aligned with IFC Performance Standards (PS) and WBG EHS Guidelines, which will include necessary E&S action plans and procedures such as Environmental Management and Monitoring Plan, Occupational Health and Safety (OHS) Plan, Waste Management Plan, Contractor Management Plan, Labor Management Plan and Worker Accommodation Guidelines, Grievance Mechanism, and others as applicable.
For decommissioning works following substation and transformer upgrades at Semtokha, BPC will develop and implement Decommissioning Environmental and Social Management Plan (D-ESMP), consistent with national laws and standards and aligned with IFC Performance Standards (PS) and WBG EHS Guidelines, including, at a minimum: a) procedures for the safe decommissioning of project facilities and equipment, including isolation of utilities and hazardous energy sources; b) measures for the dismantling and removal of redundant equipment, structures, and associated infrastructure in accordance with applicable health, safety, and environmental requirements; c) procedures for the segregation, storage, transport, and disposal of waste and decommissioned materials, including hazardous waste; d) measures to maximize the re-use and recycling of equipment and materials, where technically feasible and consistent with applicable regulatory and project requirements; e) requirements for site reinstatement and restoration, as appropriate; and g) occupational and community health and safety measures, including traffic management, incident response, access control, and stakeholder communication, to minimize risks associated with decommissioning and demobilization activities.
The ESMPs will include specific frameworks and protocols for monitoring implementation and reporting. BPC will require all contractors to implement the applicable ESMPs, monitor compliance through site inspections and audits and ensure that any non-conformances are promptly addressed and closed through verified corrective actions.
As per ESAP#2, BPC will conduct an ESIA for the proposed pooling substation at Tenchekha in accordance with IFC PS1 and with due consideration of the applicable national environmental and social requirements. Based on the ESIA findings, the Company will develop and implement E&S management and monitoring plans consistent with legal/regulatory and IFC requirements. This will involve developing and implementing plans and procedures, as applicable to the pooling substation (PSS) project, to manage E&S aspects including, where relevant: resource efficiency, climate change, air and noise emissions, effluents and discharges, hazardous materials (including transformer oil, PCBs, and SF6, where applicable), and wastes (including hazardous waste and e-waste); contractor oversight and management, labor and working conditions, and the prevention of gender-based violence and harassment; occupational and community health and safety risks, including traffic and transport safety, potential EMF exposure, and life and fire safety systems; stakeholder engagement and grievance mechanisms; supply chain risks associated with the procurement of equipment; potential for impacts on priority biodiversity values within the Project area and its immediate surroundings, where such values are identified; and other environmental and social aspects where adverse impacts are identified. A dedicated plan for E&S monitoring (both during construction and operation stages) will be developed, specifying minimum KPIs/parameters to be monitored, monitoring frequencies and the definition of thresholds that signal the need for corrective actions. Regular monitoring will be conducted, and the E&S performance (both during construction and operation stages) will be regularly reviewed and documented
Organizational Capacity and Competency. The E&S function of BPC at the corporate level is managed through the Environment, Geographic Information System (GIS), and Survey Section, which is housed within the Construction Division of the Construction and Procurement Department; it is headed by a Manager and comprises twelve members. These include Environmental Officers, Assistant Environmental Officers,Surveyors and GIS Officers, with defined roles, responsibilities, and the authority to manage the E&S performance of assets under BPC’s management. The E&S team reports to the General Manager of the Construction Division, which reports to the Director of the Construction and Procurement Department, who has direct access to the CEO and the BPC Board. The E&S team is supported by the corporate HR team (comprising the HR Management Section and the Admin & Employees Relations Section, under the Corporate Services Department), while the Safety and Quality Unit (SQU), under the Corporate Strategy Division, is responsible for planning, coordinating, and managing internal and external management system audits. At the regional/field level, BPC’s Construction Section maintains six (6) project offices to support project execution. The Transmission Department operates eight (8) Transmission Operation and Maintenance Sections (TOMS) responsible for O&M in the transmission network, while the Distribution Department oversees nineteen (19) Electricity Services Divisions (ESDs) responsible for O&M in the distribution network. These regional and field offices support the Corporate E&S team in implementing the management systems and associated plans and procedures. As per ESAP#3, BPC will assign personnel from their Construction Division to oversee EHS performance during construction works under the project. BPC will require contractors to appoint qualified EHS personnel commensurate with the scale and risk of their activities. BPC’s corporate E&S team shall provide oversight through periodic site inspections, monitoring, and review of contractors' EHS performance. During O&M stage BPC will monitor the E&S performance of facilities in accordance with its Operational Control Procedures (OCPs).
Emergency Preparedness and Response. BPC’s ESMS includes an Emergency Preparedness and Response Procedure, which provides a framework for developing site-specific Emergency Preparedness and Response Plans (EPRPs) for assets under its management. As part of ESAP#4, BPC will ensure that on-site EPRPs, in accordance with the ESMS and aligned with IFC PS requirements, are prepared and implemented for both construction and operation stages, at the Semtokha substation and Tenchekha pooling substation sites. The EPRPs will identify potential site-specific emergency scenarios, including climate-related events, and define appropriate response measures, emergency response roles and responsibilities, internal and external response arrangements, communication protocols, and the emergency response equipment and resources to be maintained at each site., BPC’s existing procedure for incident investigation will be integrated with the EPRPs to ensure that accidents/ incidents are appropriately investigated, documented, and addressed through corrective and preventive actions.
Monitoring & Reporting. Internal and external audits are conducted periodically to assess the implementation and effectiveness of the management system across the corporate headquarters and regional centers. As part of the ESMS, Company has developed a comprehensive monitoring and reporting plan for assets under its management, covering performance indicators, monitoring frequencies and responsible departments/division. Company will ensure that specific E&S monitoring plans (under ESAP#1 and 2) are developed for facilities covered under the Project and they are regularly implemented. The ESMS also requires summary of findings from the regular audit and monitoring exercises to be presented at the Management Review Meeting (MRM), providing management with the necessary insights to guide further improvements. Collectively, these processes support the effective implementation, monitoring, and continual improvement of the Company's ESMS.
PS2: Labor and Working Condition:
Human Resource (HR) Policies and Procedures, Working Conditions and Terms of Employment. In accordance with the provisions of the Companies Act of the Kingdom of Bhutan (2016) and the Labor and Employment Act of Bhutan (2007), the BPC Service Rules and Regulations (SRR) have been developed and adopted; the SRR was last updated in 2022. As part of the SRR, BPC follows a structured HR policy framework designed to ensure fairness in recruitment, employee development, and retention at the organizational level. The SRR covers recruitment and selection, service conduct, remuneration and benefits, working hours and overtime, leaves, grievance redressal, and separation. Appointment letters are issued to staff upon joining, outlining working conditions and terms of employment. Induction training is provided to new staff members to familiarize them with HR policies and procedures. The existing HR policies and procedures (as part of the SRR) apply to BPC’s regular and contracted employees; however, they do not extend to contractors' workforce deployed at BPC sites or third-party workers engaged through service providers/manpower contractors. The contracts executed between BPC and its contractors requires the selected contractors to ensure compliance with requirement under local labor laws, but formal mechanisms for periodic review and monitoring are currently lacking.
BPC has initiated the process of updating its Service Rules and Regulations and with due consideration of the applicable requirements of IFC PS2. As per ESAP#5, BPC will update its HR policies and procedures (including strengthening of existing policies or developing new policies), as applicable to employees as well as contract/third party workers, in line with applicable regulations and IFC PS 2 requirements, which among others will duly cover documented procedures relating to compliance with applicable labor laws, formal engagement of contractual workers with documented terms and conditions of employment, equal opportunity and nondiscrimination, freedom of association and collective bargaining, prevention of child labor and forced labor, contractor management system to ensure compliance and monitoring of the contractors including EHS and labour requirements, worker code of conduct for construction activities including provisions on prevention of sexual exploitation and harassment (SEAH) and gender-based violence (GBV), worker accommodation in accordance with IFC/EBRD guidance, and contract employees access to a grievance mechanism. BPC will communicate applicable policies to all employees and workers, including third party workers, to ensure their effective enforcement and provide training to support their effective implementation.
Freedom of Association. Currently there are no staff unions at BPC. The company does not restrict formation of any worker associations and BPC’s IMS Policy includes a specific commitment to the consultation and participation of workers, and, where they exist, worker's representatives.
Non-discrimination and Equal Opportunity. BPC promotes equal opportunity among employees, prohibiting discrimination of any nature. BPC’s SRR emphasizes about equal opportunities for promotion and career advancement to all employees and no cases of discrimination were observed during the appraisal. Going forward, as per ESAP#5, formal policies on non-discrimination and equal opportunity will be developed and will made applicable to all aspects of BPC’s operations.
Grievance Mechanisms. BPC has a documented grievance handling policy and procedure and the same is communicated to the employees through induction trainings. An aggrieved complainant can submit a written complaint identifying the other party, the location, and the subject of the dispute. The designated officer will acknowledge receipt within two working days and commence investigation within five working days. The complaint will be addressed within ten working days from the commencement of the investigation. If unresolved, the complainant can notify the Ministry of Labor and Human Resources to declare a labor dispute. To ensure safety and confidentiality, provisions for submitting anonymous grievances are available to all workers. BPC informed that no grievances have been reported in the past three years. Further as part of the strengthening of the HR policy framework, BPC will ensure that contract workers have access to the grievance mechanism by incorporating this requirement into the contractor management system and monitoring its implementation as part of contractor oversight (refer ESAP#5).
Prevention of Sexual Harassment. BPC has developed a framework prohibiting sexual harassment at workplace, as part of its SRR. The framework aims to eliminate incidents of sexual harassment, establish guidelines addressing such behavior, and introduce procedures for dealing with sexual harassment complaints. BPC has developed internal mechanisms for investigating and reporting complaints; however, employees are free to report such cases internally or access external legal channels through the Ministry of Labor and Human Resources. BPC stated that the most recent case of sexual harassment was reported in 2022. After an investigation by the internal committee, the case was referred to legal authorities, and the offender's employment with BPC was terminated upon confirmation of the offense.
The holding company, DHI, has adopted a policy framework on gender equality, which is applicable to all its group companies, including BPC. The framework aims to streamline mechanisms for addressing gender related issues and improving the working environment, including handling workplace harassment. It also focuses on building gender awareness and understanding, and to integrate gender considerations in planning and management practices.
Protecting the Workforce. BPC indicates its commitment in respect of child labor through its SRR. The Company does not employ anyone below 18 years of age. Based on observations during the appraisal, no instances of child labor or forced or bonded labor were noted. Further as part of the strengthening of BPC’s HR policy framework (refer ESAP#5), formal policies on prevention of child labor and forced labor will be developed and will made applicable to all aspects of BPC’s operations.
Accommodation. BPC will engage contractors to undertake the civil and E&M works associated with the substation upgrade at Semtokha and construction of the new Tenchekha pooling substation, which will require the deployment of workers at the project sites during the construction period. Semtokha civil works will require mobilisation of 10-20 workers, while GIS transformer installation will require 50-60 workers. Similarly, Tenchekha PSS will require mobilisation of around 70-80 workers. In line with ESAP #5, BPC will contractually require contractors providing labor accommodation to ensure that such accommodation is designed, operated and maintained in accordance with the IFC/EBRD Guidance on Workers' Accommodation. BPC will monitor contractor compliance through regular oversight, including periodic inspections using a labor accommodation checklist aligned with the IFC/EBRD guidance.
Occupational Health & Safety (OHS) Management. BPC’s OHS Policy aims at maintaining a healthy and safe working environment by identifying, assessing, and controlling workplace hazards; it emphasizes informing employees of known or reasonably foreseeable health and safety risks associated with their work. The IMS implemented across BPC's business activities duly incorporates OHS aspects and is certified under ISO 45001:2018 (OHS). BPC has identified the OHS risks consistent with GIIP, using standard tools such as HIRA. The HIRAs have been developed considering BPC’s operations across offices, substations, switchyards, and transmission and distribution systems. Specific management procedures have been developed to address key risks related to work at height, working in confined spaces, slip and fall, hazards due to machine works and operating power operated tools, electrical safety, falling objects and slippage of heavy materials, collapse of fabricated structures, exposure to water pressure, handling and usage of LPG cylinders, welding and gas cutting, leakage of gas/SF6, and fire hazards. Personal protective equipment (PPE), such as safety shoes, hard hats, and reflector jackets, is provided to staff and workers as needed. In the past three years, BPC reports that there has been no fatal workplace accident at any of its operational assets. The company maintains an injury register to document injuries and accidents. A review of the tracker shows an overall declining trend in non-fatal accidents over the past years (five accidents were reported in 2022, two in 2023, none in 2024 and two in 2025).
As per ESAP#1&2, BPC will ensure that a specific OHS Plans tailored to the project sites, are developed as part of the ESMPs. The ESMPs will incorporate comprehensive frameworks and protocols for monitoring and reporting.
Workers Engaged by Third parties. Third-party workers will be engaged at the Project sites through project contractors utilising manpower subcontracting agencies. These workers are mainly semi-skilled or unskilled, with their employment duration varying according to the tasks assigned. In line with ESAP#5, BPC will ensure that all contractual workers receive formal engagement contracts that clearly define terms of engagement and working conditions, aligned with National Labor Laws and IFC PS2 requirements. Additionally, BPC will establish procedures and build capacity to regularly review and monitor the performance of its contractors, particularly concerning working conditions, worker accommodation, occupational health and safety, and workforce protection, in accordance with the worker code of conduct and contractor management system.
Supply Chain. BPC has developed a Procurement Manual based on the Royal Government of Bhutan's Procurement Rules and Regulations (2019) and aims to guide the procurement process in a fair and transparent manner, ensuring equal opportunities for contractors in the awarding of works contracts, and achieving economy and efficiency in procurement practices. BPC has also implemented a Vendor Performance Management System (VPMS) to objectively evaluate supplier and manufacturer performance. As per ESAP#6, BPC will update its Procurement Manual to integrate E&S considerations into procurement procedures for major equipment suppliers. The updated procedures shall address supplier compliance with labor and OHS practices, regulatory compliance, and management of hazardous materials, as applicable, consistent with legal requirements and IFC Performance Standards.
PS3: Resource Efficiency and Pollution Prevention:
Resource Efficiency and Pollution Prevention. During the construction stage, the key resources required include water, electricity, fossil fuels (diesel), and construction materials such as cement, sand, aggregates, and reinforcement bars. Electricity will be sourced from the national grid, while water will be sourced from municipal supply as well as through tankers supplied by vendors, sourcing water from legally permitted sources; ground water will not be used for any project activities. The construction materials and diesel are procured from approved vendors. For the operational stage, BPC plans to adopt similar arrangements for sourcing water and electricity, with the demand expected to be minimal due to the nature of activities involved.
Greenhouse Gases (GHG) Emissions: The electricity for the upgraded Semtokha substation and the Tenchekha pooling substation will be sourced from the grid which is mainly from hydro power. Based on the available information on fuel and electricity requirements, the project considered for IFC financing is not expected to produce more than 25,000 tons of CO2-equivalent annually (Scope 1 and Scope 2 emissions).
Air Emissions and Noise. Air emissions from the project during the construction stage will be temporary and limited to fugitive dust generated during earthworks and exhaust emissions from construction vehicles and equipment. Noise will be produced by construction equipment and vehicles but will be intermittent and for a limited duration. During decommissioning, temporary air emissions may arise from dismantling activities and the use of equipment and vehicles, while noise associated with dismantling, lifting operations and vehicle movement may result in temporary disturbance to nearby receptors. Air emissions and noise during both construction and decommissioning will be managed through the implementation of project-specific ESMPs, as outlined in ESAP#1&2. Air emissions and noise generation during the O&M stage are not expected to be significant.
Water and Wastewater. The water requirement during the construction stage is limited to construction activities (such as concrete preparation and curing), domestic use in labor camps, dust suppression, and general housekeeping. Water requirements during decommissioning are expected to be minimal and limited to equipment cleaning and localized dust suppression. At Semtokha, water requirements will be met from the existing municipal supply from Thimphu Thromde. At Tenchekha, water will be sourced through tankers, with suppliers required to obtain water from permitted sources
The sewage generated from the labor camps will be managed through septic tanks installed on-site. Construction effluents and runoff will be managed in accordance with the construction stage ESMPs, as outlined in ESAP#1&2. Limited volumes of wastewater may be generated from equipment cleaning and workforce facilities during decommissioning. Accidental spills or leaks of transformer oil and other fluids may occur during dismantling of transformers and associated equipment and will be managed through appropriate spill prevention and response measures, secondary containment, and good housekeeping practices, aligned with the decommissioning stage ESMP (as outlined in ESAP#1). For the operational facilities, freshwater demand and domestic wastewater generation are expected to be minimal and will be managed using arrangements similar to the construction stage.
Hazardous Materials. During construction and decommissioning activities, hazardous materials will be limited to paints, solvents, oil and lubricants and will be managed in accordance with the ESMPs, as outlined in ESAP#1&2. Operational stage hazardous material will include chemicals that relate to insulation, repair and maintenance, housekeeping and pest control. The chemicals will be stored in small amounts in authorized access areas and will be managed and handled per the measures defined in their material safety data sheets.
Solid Waste Management. During construction, solid waste will primarily comprise concrete debris, scrap metal, packaging materials, wood, plastics, food waste from labor camps and other construction-related refuse. Recyclable materials will be segregated and periodically recycled through external agencies, while the remaining waste will be disposed of through the Dzongkhag (district) administration. Overall, waste management will be carried out in accordance with the construction-stage ESMPs, as outlined in ESAP#1&2.
Decommissioning of the existing transformer and associated equipment at the Semtokha substation may generate hazardous waste, including transformer oil, oil-contaminated materials, spent insulating components and, where applicable, equipment containing hazardous substances like PCBs, along with non-hazardous waste such as scrap metal and concrete. These wastes will be segregated, stored, recycled or disposed of, as appropriate, in accordance with the decommissioning-stage ESMP, as outlined in ESAP#1.
During O&M, limited quantities of solid waste, including packaging materials (such as cardboard, plastic, and pallets), scrap metals, used cables, maintenance waste (filters, rags, gaskets), e-waste (discarded electrical and electronic equipment), and general office waste will be generated and managed in accordance with BPC's Waste Management SOP.
As per ESAP#7, BPC will establish dedicated storage with secondary containment at Project sites for storage of hazardous wastes along with contractual arrangement with third-party vendors for periodic disposal of the hazardous waste generated during decommissioning and regular maintenance activities.
PS4: Community Health, Safety and Security:
Infrastructure and Equipment Design and Safety. The operational facilities of BPC are designed and managed in compliance with national electrical safety legislation. BPC’s safety management system manual considers a comprehensive framework for identifying and managing hazards and risks in accordance with relevant requirements of the Safety Regulation and Safety Code (2008) of Bhutan Electricity Authority. Annual inspection and maintenance regime is followed for electrical equipment in substations and switchyards. Similar standards and protocols will be adopted at the facilities proposed under the Project.
Traffic Management and Road Safety. For upgradation of the SS at Semtokha, the GIS supplier will be responsible for transporting the GIS from India via the Phuentsholing border and installing it at the site. As per ESAP#8, BPC will require the GIS supplier to develop and implement a Traffic Management Plan (TMP) for the transportation of GIS equipment and transformers. The TMP shall include a route survey, identification of transport risks, required road transport permits, coordination with relevant authorities, escort vehicles (lead and trailing vehicles) for oversized loads, traffic control and public safety measures, driver competency and journey management requirements, and emergency response procedures. The GIS supplier shall implement the TMP and comply with applicable regulatory requirements during transportation from the India border to the project site.
Life and Fire Safety. BPC’s offices and facilities visited during the appraisal were observed to have life and fire safety (L&FS) measures in place. These include fire detection and alarm systems, fire extinguishers, manual call points, and fire exit signage. A specific emergency organization is established, with wardens assigned to manage emergency response at individual floor levels. Regular training sessions on fire safety, emergency response, and first aid are conducted in collaboration with external agencies, and fire/emergency mock drills are periodically organized.
As part of ESAP#4, BPC will ensure that on-site EPRPs, in accordance with the ESMS and aligned with IFC PS requirements, are prepared and implemented for both construction and operation stages, at the Semtokha substation and the Tenchekha pooling substation sites. The EPRPs will identify potential site-specific emergency situations and define the corresponding response measures to be implemented and maintained at each site.
Security Personnel. The security arrangement at the BPC headquarters is managed by a third-party security agency. The agency deploys unarmed security personnel, including female staff, who are trained to manage entry and exit gates, vehicular movements, parking lots, and other areas within the office premises. The company reports no security incidents in the past at its offices and operational assets.
PS1: Assessment and Management of Environmental and Social Risks and Impacts:
Policy and Environmental and Social Management Systems. BPC has adopted an Environmental Policy, an Occupational Health and Safety Policy and an Integrated Management System (IMS) Policy, broadly aligned with the objectives of IFC’s Performance Standards. An Integrated Management System (IMS) has been implemented for BPC's overall business activities, certified according to ISO 9001:2015 (Quality Management), ISO 14001:2015 (Environmental Management), and ISO 45001:2018 (Occupational Health and Safety). The IMS applies to all aspects of BPC's operations, including the transmission and distribution of electricity, and is applicable to BPC headquarters and its 19 regional centers (Electricity Services Divisions).
As part of the ESAP, for the IFC’s previous investment (BPC Transmission # 48965), BPC augmented its IMS into an Environmental and Social Management System (ESMS), formalizing and updating the requirements for E&S procedures and plans in line with the regulatory framework, IFC PS requirements, relevant WBG EHS Guidelines and good international industry practices (GIIP). The ESMS was operationalized in April 2026. BPC will ensure the effective implementation of the ESMS requirements across the project.
Identification of Risks and Impacts and Management Programs. BPC identifies and manages E&S risks and impacts associated with its operations through compliance with applicable national standards and E&S regulatory permits and requirements. E&S risks are identified and assessed in accordance with the requirements of ISO 14001, ISO 45001, and BPC’s ESMS; BPC has established and maintains processes for identifying the E&S risks and impacts of its operations, consistent with GIIP and utilizing standard tools such as Hazard Identification and Risk Assessment (HIRA) and the Environmental Aspect and Impact (EAI) Matrix. Specific HIRA and EAI Matrices have been developed for BPC’s operations. Operational Control Procedures (OCPs) have been designed to address key safety, environmental, and operational risks across work sites, including hazards like work at height, confined spaces, electrical safety, and fire hazards. These SOPs also address environmental risks such as leakages and spillages, waste disposal, pollution, and land contamination.
As per ESAP#1, BPC will prepare a HIRA for (a) construction works associated with upgradation of the Semtokha substation, involving upgradation of 220/66kV Semtokha Air Insulated Substation (AIS) to Gas Insulated Substation (GIS), along with upgradation of the 220/66kV transformer; and for (b) decommissioning, demobilization and re-utilization of redundant equipment and structures, post substation and transformer upgradation at Semtokha. Accordingly, for the construction and installation of the GIS at Semtokha, BPC will develop and implement Construction Stage Environmental and Social Management Plan (C-ESMP), consistent with national laws and standards and aligned with IFC Performance Standards (PS) and WBG EHS Guidelines, which will include necessary E&S action plans and procedures such as Environmental Management and Monitoring Plan, Occupational Health and Safety (OHS) Plan, Waste Management Plan, Contractor Management Plan, Labor Management Plan and Worker Accommodation Guidelines, Grievance Mechanism, and others as applicable.
For decommissioning works following substation and transformer upgrades at Semtokha, BPC will develop and implement Decommissioning Environmental and Social Management Plan (D-ESMP), consistent with national laws and standards and aligned with IFC Performance Standards (PS) and WBG EHS Guidelines, including, at a minimum: a) procedures for the safe decommissioning of project facilities and equipment, including isolation of utilities and hazardous energy sources; b) measures for the dismantling and removal of redundant equipment, structures, and associated infrastructure in accordance with applicable health, safety, and environmental requirements; c) procedures for the segregation, storage, transport, and disposal of waste and decommissioned materials, including hazardous waste; d) measures to maximize the re-use and recycling of equipment and materials, where technically feasible and consistent with applicable regulatory and project requirements; e) requirements for site reinstatement and restoration, as appropriate; and g) occupational and community health and safety measures, including traffic management, incident response, access control, and stakeholder communication, to minimize risks associated with decommissioning and demobilization activities.
The ESMPs will include specific frameworks and protocols for monitoring implementation and reporting. BPC will require all contractors to implement the applicable ESMPs, monitor compliance through site inspections and audits and ensure that any non-conformances are promptly addressed and closed through verified corrective actions.
As per ESAP#2, BPC will conduct an ESIA for the proposed pooling substation at Tenchekha in accordance with IFC PS1 and with due consideration of the applicable national environmental and social requirements. Based on the ESIA findings, the Company will develop and implement E&S management and monitoring plans consistent with legal/regulatory and IFC requirements. This will involve developing and implementing plans and procedures, as applicable to the pooling substation (PSS) project, to manage E&S aspects including, where relevant: resource efficiency, climate change, air and noise emissions, effluents and discharges, hazardous materials (including transformer oil, PCBs, and SF6, where applicable), and wastes (including hazardous waste and e-waste); contractor oversight and management, labor and working conditions, and the prevention of gender-based violence and harassment; occupational and community health and safety risks, including traffic and transport safety, potential EMF exposure, and life and fire safety systems; stakeholder engagement and grievance mechanisms; supply chain risks associated with the procurement of equipment; potential for impacts on priority biodiversity values within the Project area and its immediate surroundings, where such values are identified; and other environmental and social aspects where adverse impacts are identified. A dedicated plan for E&S monitoring (both during construction and operation stages) will be developed, specifying minimum KPIs/parameters to be monitored, monitoring frequencies and the definition of thresholds that signal the need for corrective actions. Regular monitoring will be conducted, and the E&S performance (both during construction and operation stages) will be regularly reviewed and documented
Organizational Capacity and Competency. The E&S function of BPC at the corporate level is managed through the Environment, Geographic Information System (GIS), and Survey Section, which is housed within the Construction Division of the Construction and Procurement Department; it is headed by a Manager and comprises twelve members. These include Environmental Officers, Assistant Environmental Officers,Surveyors and GIS Officers, with defined roles, responsibilities, and the authority to manage the E&S performance of assets under BPC’s management. The E&S team reports to the General Manager of the Construction Division, which reports to the Director of the Construction and Procurement Department, who has direct access to the CEO and the BPC Board. The E&S team is supported by the corporate HR team (comprising the HR Management Section and the Admin & Employees Relations Section, under the Corporate Services Department), while the Safety and Quality Unit (SQU), under the Corporate Strategy Division, is responsible for planning, coordinating, and managing internal and external management system audits. At the regional/field level, BPC’s Construction Section maintains six (6) project offices to support project execution. The Transmission Department operates eight (8) Transmission Operation and Maintenance Sections (TOMS) responsible for O&M in the transmission network, while the Distribution Department oversees nineteen (19) Electricity Services Divisions (ESDs) responsible for O&M in the distribution network. These regional and field offices support the Corporate E&S team in implementing the management systems and associated plans and procedures. As per ESAP#3, BPC will assign personnel from their Construction Division to oversee EHS performance during construction works under the project. BPC will require contractors to appoint qualified EHS personnel commensurate with the scale and risk of their activities. BPC’s corporate E&S team shall provide oversight through periodic site inspections, monitoring, and review of contractors' EHS performance. During O&M stage BPC will monitor the E&S performance of facilities in accordance with its Operational Control Procedures (OCPs).
Emergency Preparedness and Response. BPC’s ESMS includes an Emergency Preparedness and Response Procedure, which provides a framework for developing site-specific Emergency Preparedness and Response Plans (EPRPs) for assets under its management. As part of ESAP#4, BPC will ensure that on-site EPRPs, in accordance with the ESMS and aligned with IFC PS requirements, are prepared and implemented for both construction and operation stages, at the Semtokha substation and Tenchekha pooling substation sites. The EPRPs will identify potential site-specific emergency scenarios, including climate-related events, and define appropriate response measures, emergency response roles and responsibilities, internal and external response arrangements, communication protocols, and the emergency response equipment and resources to be maintained at each site., BPC’s existing procedure for incident investigation will be integrated with the EPRPs to ensure that accidents/ incidents are appropriately investigated, documented, and addressed through corrective and preventive actions.
Monitoring & Reporting. Internal and external audits are conducted periodically to assess the implementation and effectiveness of the management system across the corporate headquarters and regional centers. As part of the ESMS, Company has developed a comprehensive monitoring and reporting plan for assets under its management, covering performance indicators, monitoring frequencies and responsible departments/division. Company will ensure that specific E&S monitoring plans (under ESAP#1 and 2) are developed for facilities covered under the Project and they are regularly implemented. The ESMS also requires summary of findings from the regular audit and monitoring exercises to be presented at the Management Review Meeting (MRM), providing management with the necessary insights to guide further improvements. Collectively, these processes support the effective implementation, monitoring, and continual improvement of the Company's ESMS.
PS2: Labor and Working Condition:
Human Resource (HR) Policies and Procedures, Working Conditions and Terms of Employment. In accordance with the provisions of the Companies Act of the Kingdom of Bhutan (2016) and the Labor and Employment Act of Bhutan (2007), the BPC Service Rules and Regulations (SRR) have been developed and adopted; the SRR was last updated in 2022. As part of the SRR, BPC follows a structured HR policy framework designed to ensure fairness in recruitment, employee development, and retention at the organizational level. The SRR covers recruitment and selection, service conduct, remuneration and benefits, working hours and overtime, leaves, grievance redressal, and separation. Appointment letters are issued to staff upon joining, outlining working conditions and terms of employment. Induction training is provided to new staff members to familiarize them with HR policies and procedures. The existing HR policies and procedures (as part of the SRR) apply to BPC’s regular and contracted employees; however, they do not extend to contractors' workforce deployed at BPC sites or third-party workers engaged through service providers/manpower contractors. The contracts executed between BPC and its contractors requires the selected contractors to ensure compliance with requirement under local labor laws, but formal mechanisms for periodic review and monitoring are currently lacking.
BPC has initiated the process of updating its Service Rules and Regulations and with due consideration of the applicable requirements of IFC PS2. As per ESAP#5, BPC will update its HR policies and procedures (including strengthening of existing policies or developing new policies), as applicable to employees as well as contract/third party workers, in line with applicable regulations and IFC PS 2 requirements, which among others will duly cover documented procedures relating to compliance with applicable labor laws, formal engagement of contractual workers with documented terms and conditions of employment, equal opportunity and nondiscrimination, freedom of association and collective bargaining, prevention of child labor and forced labor, contractor management system to ensure compliance and monitoring of the contractors including EHS and labour requirements, worker code of conduct for construction activities including provisions on prevention of sexual exploitation and harassment (SEAH) and gender-based violence (GBV), worker accommodation in accordance with IFC/EBRD guidance, and contract employees access to a grievance mechanism. BPC will communicate applicable policies to all employees and workers, including third party workers, to ensure their effective enforcement and provide training to support their effective implementation.
Freedom of Association. Currently there are no staff unions at BPC. The company does not restrict formation of any worker associations and BPC’s IMS Policy includes a specific commitment to the consultation and participation of workers, and, where they exist, worker's representatives.
Non-discrimination and Equal Opportunity. BPC promotes equal opportunity among employees, prohibiting discrimination of any nature. BPC’s SRR emphasizes about equal opportunities for promotion and career advancement to all employees and no cases of discrimination were observed during the appraisal. Going forward, as per ESAP#5, formal policies on non-discrimination and equal opportunity will be developed and will made applicable to all aspects of BPC’s operations.
Grievance Mechanisms. BPC has a documented grievance handling policy and procedure and the same is communicated to the employees through induction trainings. An aggrieved complainant can submit a written complaint identifying the other party, the location, and the subject of the dispute. The designated officer will acknowledge receipt within two working days and commence investigation within five working days. The complaint will be addressed within ten working days from the commencement of the investigation. If unresolved, the complainant can notify the Ministry of Labor and Human Resources to declare a labor dispute. To ensure safety and confidentiality, provisions for submitting anonymous grievances are available to all workers. BPC informed that no grievances have been reported in the past three years. Further as part of the strengthening of the HR policy framework, BPC will ensure that contract workers have access to the grievance mechanism by incorporating this requirement into the contractor management system and monitoring its implementation as part of contractor oversight (refer ESAP#5).
Prevention of Sexual Harassment. BPC has developed a framework prohibiting sexual harassment at workplace, as part of its SRR. The framework aims to eliminate incidents of sexual harassment, establish guidelines addressing such behavior, and introduce procedures for dealing with sexual harassment complaints. BPC has developed internal mechanisms for investigating and reporting complaints; however, employees are free to report such cases internally or access external legal channels through the Ministry of Labor and Human Resources. BPC stated that the most recent case of sexual harassment was reported in 2022. After an investigation by the internal committee, the case was referred to legal authorities, and the offender's employment with BPC was terminated upon confirmation of the offense.
The holding company, DHI, has adopted a policy framework on gender equality, which is applicable to all its group companies, including BPC. The framework aims to streamline mechanisms for addressing gender related issues and improving the working environment, including handling workplace harassment. It also focuses on building gender awareness and understanding, and to integrate gender considerations in planning and management practices.
Protecting the Workforce. BPC indicates its commitment in respect of child labor through its SRR. The Company does not employ anyone below 18 years of age. Based on observations during the appraisal, no instances of child labor or forced or bonded labor were noted. Further as part of the strengthening of BPC’s HR policy framework (refer ESAP#5), formal policies on prevention of child labor and forced labor will be developed and will made applicable to all aspects of BPC’s operations.
Accommodation. BPC will engage contractors to undertake the civil and E&M works associated with the substation upgrade at Semtokha and construction of the new Tenchekha pooling substation, which will require the deployment of workers at the project sites during the construction period. Semtokha civil works will require mobilisation of 10-20 workers, while GIS transformer installation will require 50-60 workers. Similarly, Tenchekha PSS will require mobilisation of around 70-80 workers. In line with ESAP #5, BPC will contractually require contractors providing labor accommodation to ensure that such accommodation is designed, operated and maintained in accordance with the IFC/EBRD Guidance on Workers' Accommodation. BPC will monitor contractor compliance through regular oversight, including periodic inspections using a labor accommodation checklist aligned with the IFC/EBRD guidance.
Occupational Health & Safety (OHS) Management. BPC’s OHS Policy aims at maintaining a healthy and safe working environment by identifying, assessing, and controlling workplace hazards; it emphasizes informing employees of known or reasonably foreseeable health and safety risks associated with their work. The IMS implemented across BPC's business activities duly incorporates OHS aspects and is certified under ISO 45001:2018 (OHS). BPC has identified the OHS risks consistent with GIIP, using standard tools such as HIRA. The HIRAs have been developed considering BPC’s operations across offices, substations, switchyards, and transmission and distribution systems. Specific management procedures have been developed to address key risks related to work at height, working in confined spaces, slip and fall, hazards due to machine works and operating power operated tools, electrical safety, falling objects and slippage of heavy materials, collapse of fabricated structures, exposure to water pressure, handling and usage of LPG cylinders, welding and gas cutting, leakage of gas/SF6, and fire hazards. Personal protective equipment (PPE), such as safety shoes, hard hats, and reflector jackets, is provided to staff and workers as needed. In the past three years, BPC reports that there has been no fatal workplace accident at any of its operational assets. The company maintains an injury register to document injuries and accidents. A review of the tracker shows an overall declining trend in non-fatal accidents over the past years (five accidents were reported in 2022, two in 2023, none in 2024 and two in 2025).
As per ESAP#1&2, BPC will ensure that a specific OHS Plans tailored to the project sites, are developed as part of the ESMPs. The ESMPs will incorporate comprehensive frameworks and protocols for monitoring and reporting.
Workers Engaged by Third parties. Third-party workers will be engaged at the Project sites through project contractors utilising manpower subcontracting agencies. These workers are mainly semi-skilled or unskilled, with their employment duration varying according to the tasks assigned. In line with ESAP#5, BPC will ensure that all contractual workers receive formal engagement contracts that clearly define terms of engagement and working conditions, aligned with National Labor Laws and IFC PS2 requirements. Additionally, BPC will establish procedures and build capacity to regularly review and monitor the performance of its contractors, particularly concerning working conditions, worker accommodation, occupational health and safety, and workforce protection, in accordance with the worker code of conduct and contractor management system.
Supply Chain. BPC has developed a Procurement Manual based on the Royal Government of Bhutan's Procurement Rules and Regulations (2019) and aims to guide the procurement process in a fair and transparent manner, ensuring equal opportunities for contractors in the awarding of works contracts, and achieving economy and efficiency in procurement practices. BPC has also implemented a Vendor Performance Management System (VPMS) to objectively evaluate supplier and manufacturer performance. As per ESAP#6, BPC will update its Procurement Manual to integrate E&S considerations into procurement procedures for major equipment suppliers. The updated procedures shall address supplier compliance with labor and OHS practices, regulatory compliance, and management of hazardous materials, as applicable, consistent with legal requirements and IFC Performance Standards.
PS3: Resource Efficiency and Pollution Prevention:
Resource Efficiency and Pollution Prevention. During the construction stage, the key resources required include water, electricity, fossil fuels (diesel), and construction materials such as cement, sand, aggregates, and reinforcement bars. Electricity will be sourced from the national grid, while water will be sourced from municipal supply as well as through tankers supplied by vendors, sourcing water from legally permitted sources; ground water will not be used for any project activities. The construction materials and diesel are procured from approved vendors. For the operational stage, BPC plans to adopt similar arrangements for sourcing water and electricity, with the demand expected to be minimal due to the nature of activities involved.
Greenhouse Gases (GHG) Emissions: The electricity for the upgraded Semtokha substation and the Tenchekha pooling substation will be sourced from the grid which is mainly from hydro power. Based on the available information on fuel and electricity requirements, the project considered for IFC financing is not expected to produce more than 25,000 tons of CO2-equivalent annually (Scope 1 and Scope 2 emissions).
Air Emissions and Noise. Air emissions from the project during the construction stage will be temporary and limited to fugitive dust generated during earthworks and exhaust emissions from construction vehicles and equipment. Noise will be produced by construction equipment and vehicles but will be intermittent and for a limited duration. During decommissioning, temporary air emissions may arise from dismantling activities and the use of equipment and vehicles, while noise associated with dismantling, lifting operations and vehicle movement may result in temporary disturbance to nearby receptors. Air emissions and noise during both construction and decommissioning will be managed through the implementation of project-specific ESMPs, as outlined in ESAP#1&2. Air emissions and noise generation during the O&M stage are not expected to be significant.
Water and Wastewater. The water requirement during the construction stage is limited to construction activities (such as concrete preparation and curing), domestic use in labor camps, dust suppression, and general housekeeping. Water requirements during decommissioning are expected to be minimal and limited to equipment cleaning and localized dust suppression. At Semtokha, water requirements will be met from the existing municipal supply from Thimphu Thromde. At Tenchekha, water will be sourced through tankers, with suppliers required to obtain water from permitted sources
The sewage generated from the labor camps will be managed through septic tanks installed on-site. Construction effluents and runoff will be managed in accordance with the construction stage ESMPs, as outlined in ESAP#1&2. Limited volumes of wastewater may be generated from equipment cleaning and workforce facilities during decommissioning. Accidental spills or leaks of transformer oil and other fluids may occur during dismantling of transformers and associated equipment and will be managed through appropriate spill prevention and response measures, secondary containment, and good housekeeping practices, aligned with the decommissioning stage ESMP (as outlined in ESAP#1). For the operational facilities, freshwater demand and domestic wastewater generation are expected to be minimal and will be managed using arrangements similar to the construction stage.
Hazardous Materials. During construction and decommissioning activities, hazardous materials will be limited to paints, solvents, oil and lubricants and will be managed in accordance with the ESMPs, as outlined in ESAP#1&2. Operational stage hazardous material will include chemicals that relate to insulation, repair and maintenance, housekeeping and pest control. The chemicals will be stored in small amounts in authorized access areas and will be managed and handled per the measures defined in their material safety data sheets.
Solid Waste Management. During construction, solid waste will primarily comprise concrete debris, scrap metal, packaging materials, wood, plastics, food waste from labor camps and other construction-related refuse. Recyclable materials will be segregated and periodically recycled through external agencies, while the remaining waste will be disposed of through the Dzongkhag (district) administration. Overall, waste management will be carried out in accordance with the construction-stage ESMPs, as outlined in ESAP#1&2.
Decommissioning of the existing transformer and associated equipment at the Semtokha substation may generate hazardous waste, including transformer oil, oil-contaminated materials, spent insulating components and, where applicable, equipment containing hazardous substances like PCBs, along with non-hazardous waste such as scrap metal and concrete. These wastes will be segregated, stored, recycled or disposed of, as appropriate, in accordance with the decommissioning-stage ESMP, as outlined in ESAP#1.
During O&M, limited quantities of solid waste, including packaging materials (such as cardboard, plastic, and pallets), scrap metals, used cables, maintenance waste (filters, rags, gaskets), e-waste (discarded electrical and electronic equipment), and general office waste will be generated and managed in accordance with BPC's Waste Management SOP.
As per ESAP#7, BPC will establish dedicated storage with secondary containment at Project sites for storage of hazardous wastes along with contractual arrangement with third-party vendors for periodic disposal of the hazardous waste generated during decommissioning and regular maintenance activities.
PS4: Community Health, Safety and Security:
Infrastructure and Equipment Design and Safety. The operational facilities of BPC are designed and managed in compliance with national electrical safety legislation. BPC’s safety management system manual considers a comprehensive framework for identifying and managing hazards and risks in accordance with relevant requirements of the Safety Regulation and Safety Code (2008) of Bhutan Electricity Authority. Annual inspection and maintenance regime is followed for electrical equipment in substations and switchyards. Similar standards and protocols will be adopted at the facilities proposed under the Project.
Traffic Management and Road Safety. For upgradation of the SS at Semtokha, the GIS supplier will be responsible for transporting the GIS from India via the Phuentsholing border and installing it at the site. As per ESAP#8, BPC will require the GIS supplier to develop and implement a Traffic Management Plan (TMP) for the transportation of GIS equipment and transformers. The TMP shall include a route survey, identification of transport risks, required road transport permits, coordination with relevant authorities, escort vehicles (lead and trailing vehicles) for oversized loads, traffic control and public safety measures, driver competency and journey management requirements, and emergency response procedures. The GIS supplier shall implement the TMP and comply with applicable regulatory requirements during transportation from the India border to the project site.
Life and Fire Safety. BPC’s offices and facilities visited during the appraisal were observed to have life and fire safety (L&FS) measures in place. These include fire detection and alarm systems, fire extinguishers, manual call points, and fire exit signage. A specific emergency organization is established, with wardens assigned to manage emergency response at individual floor levels. Regular training sessions on fire safety, emergency response, and first aid are conducted in collaboration with external agencies, and fire/emergency mock drills are periodically organized.
As part of ESAP#4, BPC will ensure that on-site EPRPs, in accordance with the ESMS and aligned with IFC PS requirements, are prepared and implemented for both construction and operation stages, at the Semtokha substation and the Tenchekha pooling substation sites. The EPRPs will identify potential site-specific emergency situations and define the corresponding response measures to be implemented and maintained at each site.
Security Personnel. The security arrangement at the BPC headquarters is managed by a third-party security agency. The agency deploys unarmed security personnel, including female staff, who are trained to manage entry and exit gates, vehicular movements, parking lots, and other areas within the office premises. The company reports no security incidents in the past at its offices and operational assets.
Stakeholder Engagement
BPC’s ESMS includes a Stakeholder Engagement Policy and Stakeholder Engagement Plan (SEP), aligned with the IFC Performance Standards, which govern stakeholder engagement throughout the project lifecycle. Together, they provide a framework for preparing project-specific stakeholder engagement plans and establishing mechanisms to receive, record and address stakeholder grievances. As per ESAP #9, will establish community grievance mechanism (GM) and stakeholder engagement plan (SEP) in line with its ESMS and IFC PS 1 requirements, to communicate with the local community and address community grievances related to the project’s construction and operation stages. BPC’s project team and onsite contractors will be trained in implementing SEP and GM. BPC will monitor project level engagement activities as well as the grievance mechanism, as a part of its ESMS
Any queries and/or comments about the project may be directed to:
Company Bhutan Power Corporation Limited Point of Contact Mr. Ugyen Dorji Title Manager, EGSS, CD, C&PD Telephone Number +97517652616 Email HYPERLINK "mailto:ugyendorji2013@bpc.bt" ugyendorji2013@bpc.bt Mailing Address Yarden Lam, Chubachu; Thimphu, Bhutan Website HYPERLINK "https://www.bpc.bt/" https://www.bpc.bt/ Company's address Yarden Lam, Chubachu; Thimphu, Bhutan
Company Bhutan Power Corporation Limited Point of Contact Mr. Ugyen Dorji Title Manager, EGSS, CD, C&PD Telephone Number +97517652616 Email HYPERLINK "mailto:ugyendorji2013@bpc.bt" ugyendorji2013@bpc.bt Mailing Address Yarden Lam, Chubachu; Thimphu, Bhutan Website HYPERLINK "https://www.bpc.bt/" https://www.bpc.bt/ Company's address Yarden Lam, Chubachu; Thimphu, Bhutan
Broad Community Support
Broad Community Support is not applicable for this project.
Environmental & Social Action Plan
| S.no | Description | Anticipated Completion Date |
|---|---|---|
| 1 | BPC will prepare a HIRA for (a) construction works associated with upgradation of the Semtokha substation, involving upgradation of 220/66kV Semtokha Air Insulated Substation (AIS) to Gas Insulated Substation (GIS), along with upgradation of the 220/66kV transformer; and for (b) decommissioning, demobilization and re-utilization of redundant equipment and structures, post substation and transformer upgradation at Semtokha.Accordingly, for the construction and installation of the GIS at Semtokha, BPC will develop and implement Construction Stage Environmental and Social Management Plan (C-ESMP), consistent with national laws and standards and aligned with IFC Performance Standards (PS) and WBG EHS Guidelines, which will include necessary E&S action plans and procedures such as Environmental Management and Monitoring Plan, Occupational Health and Safety (OHS) Plan, Waste Management Plan, Contractor Management Plan, Labor Management Plan and Worker Accommodation Guidelines, Grievance Mechanism, and others as applicable. For decommissioning works following substation and transformer upgrades at Semtokha, BPC will develop and implement Decommissioning Environmental and Social Management Plan (D-ESMP), which shall include, at a minimum: a) procedures for the safe decommissioning of project facilities and equipment, including isolation of utilities and hazardous energy sources; b) measures for the dismantling and removal of redundant equipment, structures, and associated infrastructure in accordance with applicable health, safety, and environmental requirements; c) procedures for the segregation, storage, transport, and disposal of waste and decommissioned materials, including hazardous waste; d) measures to maximize the re-use and recycling of equipment and materials, where technically feasible and consistent with applicable regulatory and project requirements; e) requirements for site reinstatement and restoration, as appropriate; and g) occupational and community health and safety measures, including traffic management, incident response, access control, and stakeholder communication, to minimize risks associated with decommissioning and demobilization activities. The ESMPs will include specific frameworks and protocols for monitoring implementation and reporting. BPC will require all contractors to implement the applicable ESMPs, monitor compliance through site inspections and audits and ensure that any non-conformances are promptly addressed and closed through verified corrective actions. | 12/31/2026 |
| 2 | BPC will conduct an ESIA for the proposed pooling substation at Tenchekha in accordance with IFC PS1 and with due consideration of the applicable national environmental and social requirements. Based on the ESIA findings, the Company will develop and implement E&S management and monitoring plans consistent with legal/regulatory and IFC requirements. This will involve developing and implementing plans and procedures, as applicable to the pooling substation project, to manage E&S aspects including, where relevant: resource efficiency, climate change, air and noise emissions, effluents and discharges, hazardous materials (including transformer oil, PCBs, and SF6, where applicable), and wastes (including hazardous waste and e-waste); contractor oversight and management, labor and working conditions, and the prevention of gender-based violence and harassment; occupational and community health and safety risks, including traffic and transport safety, potential EMF exposure, and life and fire safety systems; stakeholder engagement and grievance mechanisms; supply chain risks associated with the procurement of equipment; potential for impacts on priority biodiversity values within the Project area and its immediate surroundings, where such values are identified; and other environmental and social aspects where adverse impacts are identified. A dedicated plan for E&S monitoring will be developed, specifying minimum KPIs/parameters to be monitored, monitoring frequencies and the definition of thresholds that signal the need for corrective actions. Regular monitoring will be conducted, and the E&S performance (both during construction and operation stages) will be regularly reviewed and documented. | 06/30/2027 |
| 3 | BPC will assign personnel from their Construction Division to oversee EHS performance during construction works under the project. BPC will require contractors to appoint qualified EHS personnel, commensurate with the scale and risk of their activities. BPC’s corporate E&S team shall provide oversight through periodic site inspections, monitoring, and review of contractors' EHS performance. During O&M stage BPC will monitor the E&S performance of facilities in accordance with its Operational Control Procedures (OCPs). | 12/31/2027 |
| 4 | BPC will ensure that on-site EPRPs, in accordance with the ESMS and aligned with IFC PS requirements, are prepared and implemented for both construction and operation stages, at the Semtokha substation and Tenchekha pooling substation sites. The EPRPs will identify potential site-specific emergency scenarios, including climate-related events, and define appropriate response measures, emergency response roles and responsibilities, internal and external response arrangements, communication protocols, and the emergency response equipment and resources to be maintained at each site. BPC’s existing procedure for incident investigation will be integrated with the EPRPs to ensure that accidents/incidents are appropriately investigated, documented, and addressed through corrective and preventive actions. | 04/30/2027 |
| 5 | BPC will update its HR policies and procedures (including strengthening of existing policies or developing new policies), as applicable to employees as well as contract/third party workers, in line with applicable regulations and IFC PS 2 requirements, which among others will duly cover documented procedures relating to compliance with applicable labor laws, formal engagement of contractual workers with documented terms and conditions of employment, equal opportunity and nondiscrimination, freedom of association and collective bargaining, prevention of child labor and forced labor, contractor management system to ensure compliance and monitoring of the contractors including EHS and labour requirements, worker code of conduct for construction activities including provisions on prevention of of sexual exploitation and harassment (SEAH) and gender-based violence (GBV), worker accommodation in accordance with IFC/EBRD guidance, and contract employees access to a grievance mechanism. BPC will communicate applicable policies to all employees and workers, including third party workers, to ensure their effective enforcement and provide training to support their effective implementation. | 04/30/2027 |
| 6 | BPC will update its Procurement Manual to integrate E&S considerations into procurement procedures for major equipment suppliers. The updated procedures shall address supplier compliance with labor and OHS practices, regulatory compliance, and management of hazardous materials, as applicable, consistent with legal requirements and IFC Performance Standards. | 04/30/2027 |
| 7 | BPC will build dedicated storage with secondary containment at both Semtokha and Tenchekha sites for storage of hazardous wastes along with contractual arrangement with third-party vendors for disposal of the hazardous waste at periodic intervals. | 04/30/2027 |
| 8 | BPC will require the GIS supplier to develop and implement a Traffic Management Plan (TMP) for the transportation of GIS equipment and transformers. The TMP shall include a route survey, identification of transport risks, required road transport permits, coordination with relevant authorities, escort vehicles (lead and trailing vehicles) for oversized loads, traffic control and public safety measures, driver competency and journey management requirements, and emergency response procedures. The GIS supplier shall implement the TMP and comply with applicable regulatory requirements during transportation from the India border to the project site. | 11/30/2026 |
| 9 | BPC will establish community grievance mechanism (GM) and stakeholder engagement plan (SEP) in line with its ESMS and IFC PS 1 requirements, to communicate with the local community and address community grievances related to the project’s construction and operation stages. BPC’s project team and onsite contractors will be trained in implementing SEP and GM. BPC will monitor project level engagement activities as well as the grievance mechanism, as a part of its ESMS. | 04/30/2027 |
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**Information on IFC's Policy and Performance Standards on Environmental and Social Sustainability can be found at www.ifc.org/sustainability
IFC supports its clients in addressing environmental and social issues arising from their business activities by requiring its real sector clients to set up and administer appropriate grievance mechanisms and/or procedures to address complaints from Affected Communities in relation to environmental and social issues arising from IFC's clients' business activities. Since 2012, IFC's Financial Intermediary clients applying the Performance Standards are required to develop External Communications Mechanisms to receive and review inquiries or complaints from any interested party regarding the E&S risks and impacts of their operations.
For IFC projects that are active or under consideration, individual(s), or their authorized representative(s), who allege they have been or will be adversely affected by E&S risks or impacts arising from IFC's clients' business activities, may submit a complaint to IFC directly for consideration. When receiving an E&S complaint, IFC engages with complainants and works with its clients to find solutions to E&S concerns as quickly and efficiently as possible.
Complaints can be submitted to IFC online at www.ifc.org/escomplaints or by email to EScomplaints@ifc.org.
IFC complaint response is separate from and complementary to IFC’s clients’ project level grievance mechanisms and IFC’s Independent Accountability Mechanism (CAO). Lodging a complaint directly with IFC does not, at any time, restrict access to CAO.
Affected communities have unrestricted access to the Compliance Advisor Ombudsman (CAO), the independent accountability mechanism for IFC and MIGA. CAO facilitates the resolution of complaints related to IFC and MIGA projects and sub-projects, undertakes reviews of IFC’s and MIGA’s environmental and social compliance, fosters public accountability for their commitments, and enhances the environmental and social performance of IFC and MIGA.
Independent of IFC and MIGA management and reporting directly to the IFC and MIGA Boards of Executive Directors, CAO helps resolve issues raised about the environmental and social impacts of projects through a neutral, collaborative, problem-solving approach via its Dispute Resolution function. It also reviews IFC’s and MIGA’s compliance with environmental and social policies, assesses related harm, and recommends remedial actions through its Compliance function. Additionally, CAO provides advice to IFC, MIGA, and their Boards to enhance environmental and social sustainability performance and minimize the risk of harm.
Complaints may relate to environmental and social harm regarding any aspect of the planning, implementation, or impact of a project or sub-project, and can be made by any individual, group, community, entity, or other party affected or likely to be affected by the environmental or social impacts of an IFC- or MIGA-financed business activity.
Complaints can be submitted by any of the following methods:
CAO receives and addresses complaints in accordance with the CAO Policy, which can be accessed at: https://www.cao-ombudsman.org/policies-guidelines.
IFC supports its clients in addressing environmental and social issues arising from their business activities by requiring its real sector clients to set up and administer appropriate grievance mechanisms and/or procedures to address complaints from Affected Communities in relation to environmental and social issues arising from IFC's clients' business activities. Since 2012, IFC's Financial Intermediary clients applying the Performance Standards are required to develop External Communications Mechanisms to receive and review inquiries or complaints from any interested party regarding the E&S risks and impacts of their operations.
For IFC projects that are active or under consideration, individual(s), or their authorized representative(s), who allege they have been or will be adversely affected by E&S risks or impacts arising from IFC's clients' business activities, may submit a complaint to IFC directly for consideration. When receiving an E&S complaint, IFC engages with complainants and works with its clients to find solutions to E&S concerns as quickly and efficiently as possible.
Complaints can be submitted to IFC online at www.ifc.org/escomplaints or by email to EScomplaints@ifc.org.
IFC complaint response is separate from and complementary to IFC’s clients’ project level grievance mechanisms and IFC’s Independent Accountability Mechanism (CAO). Lodging a complaint directly with IFC does not, at any time, restrict access to CAO.
Affected communities have unrestricted access to the Compliance Advisor Ombudsman (CAO), the independent accountability mechanism for IFC and MIGA. CAO facilitates the resolution of complaints related to IFC and MIGA projects and sub-projects, undertakes reviews of IFC’s and MIGA’s environmental and social compliance, fosters public accountability for their commitments, and enhances the environmental and social performance of IFC and MIGA.
Independent of IFC and MIGA management and reporting directly to the IFC and MIGA Boards of Executive Directors, CAO helps resolve issues raised about the environmental and social impacts of projects through a neutral, collaborative, problem-solving approach via its Dispute Resolution function. It also reviews IFC’s and MIGA’s compliance with environmental and social policies, assesses related harm, and recommends remedial actions through its Compliance function. Additionally, CAO provides advice to IFC, MIGA, and their Boards to enhance environmental and social sustainability performance and minimize the risk of harm.
Complaints may relate to environmental and social harm regarding any aspect of the planning, implementation, or impact of a project or sub-project, and can be made by any individual, group, community, entity, or other party affected or likely to be affected by the environmental or social impacts of an IFC- or MIGA-financed business activity.
Complaints can be submitted by any of the following methods:
- Online form: available at https://www.cao-ombudsman.org/
- Mail/Hand Delivery to: 2121 Pennsylvania Avenue, NW, Washington, DC 20433, USA
- Voice mail: +1 202 458 1973
- Email: cao@worldbankgroup.org
- SMS, WhatsApp, Telegram, and Signal: +1 202 650 2627
CAO receives and addresses complaints in accordance with the CAO Policy, which can be accessed at: https://www.cao-ombudsman.org/policies-guidelines.
This Environmental and Social Review Summary (ESRS) is prepared by IFC to disclose its findings and recommendations related to environmental and social considerations regarding potential investments. Its purpose is to enhance the transparency of IFC's activities. For any project documentation or data included or attached herein, whether prepared by the project sponsor or otherwise, authorization has been given for public release by the project sponsor. IFC considers that this ESRS is of adequate quality for release to the public, but has not necessarily independently verified all of the project information therein.
It is distributed in advance of IFC Board of Directors' consideration and may be periodically updated thereafter. Board dates are estimates only and this document should not be construed as presuming the outcome of the Board Directors’ decision. The following ESRS is disclosed in accordance with IFC's Access to Information Policy (AIP).
The map is for illustrative purposes and does not imply the expression of any opinion on the part of the World Bank, concerning the legal status of any country or territory or concerning the delimitation of frontiers or boundaries. Country borders or names do not necessarily reflect the World Bank Group's official position. In some cases, available project location information is limited to the country of the project's activities. Locations are approximate.
It is distributed in advance of IFC Board of Directors' consideration and may be periodically updated thereafter. Board dates are estimates only and this document should not be construed as presuming the outcome of the Board Directors’ decision. The following ESRS is disclosed in accordance with IFC's Access to Information Policy (AIP).
The map is for illustrative purposes and does not imply the expression of any opinion on the part of the World Bank, concerning the legal status of any country or territory or concerning the delimitation of frontiers or boundaries. Country borders or names do not necessarily reflect the World Bank Group's official position. In some cases, available project location information is limited to the country of the project's activities. Locations are approximate.