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.
PS 1 - Assessment and Management of Environmental & Social Risks and Impacts
Environmental & Social Policy and Management System: Eauxwell has established an ESMS comprising a corporate Health, Safety and Environment (HSE) Policy and management procedures covering HSE, waste, environmental management, labor, contractor management, emergency response, community engagement, grievance management. To align the ESMS with the DARES ESMF and IFC PSs, the Company will: (i) incorporate the DARES-provided screening and exclusion checklists and E&S risk assessment templates into the ESMS; (ii) develop a stand-alone E&S Monitoring and Reporting Procedure to include key E&S performance indicators (KPIs), and periodic management review of E&S performance and the effectiveness of risk mitigation measures across the Project portfolio; (iii) update its corporate-level Emergency Response Plan (ERP) to reflect the full project scale and develop site-specific Emergency Response Plans for all project sites; (iv) develop a Land Acquisition Procedure to ensure site screening and land acquisition processes will operationalize the IFC PS5 avoidance principle, including exclusion of sites that would require physical or economic displacement and establishing requirements for monitoring of land-related social risks; (v) update its corporate-level ERP to reflect current operations and project scale and will develop and implement site-specific ERPs for all project sites based on site-specific risk profiles and credible emergency scenarios in line with GIIP and IFC PS requirements; (vi) update to the Contractor Labor Management Procedure, by setting standard compliance monitoring, auditing and verification; (vii) develop a Road Transport Safety Management Procedure consistent with the scope of the operations, in line with IFC PS4 requirements; (viii) develop a Security Management Procedure to support the safe and secure development and operations of the Project, in line with IFC PS4 requirements, and; (ix) develop an Supply Chain Due Diligence Procedure (ESAP #1).
Identification of Risks and Impacts: Eauxwell applies a structured E&S screening checklist at the project development stage to identify E&S risks and impacts prior to site selection and construction. The checklist assesses key risk areas including land use, biodiversity, community interactions, environmental sensitivities, involuntary resettlement, cultural heritage and GBV. Where screening results indicate the need for more detailed assessment, site-specific ESIAs or ESMPs are undertaken in line with IFC PSs. Exclusion criteria applied during site selection is defined by the DARES ESMF. Prior to commencement of activities on each site, sufficient time is provided to allow for harvesting of crops in cases where farming is ongoing. The low voltage distribution lines are designed to run along the village roads; hence the E&S risks can be managed within the Company’s standard management procedures. To address E&S risk identification and assessment during project construction and operation, Eauxwell will (i) develop and implement a corporate and site-specific E&S risk registers to formalise identification, tracking and management of E&S risks across the portfolio; (ii) develop site-specific E&S Management Plans (ESMPs) consistent with the DARES ESMF, IFC PSs and relevant Nigerian regulations for all 73 proposed mini-grid sites prior to commencement of construction at each site; and (iii) develop and integrate operation-phase E&S risk assessment checklist into the updated E&S Monitoring and Reporting Procedure (ESAP #2).
All the proposed project sites are in modified habitats and none triggers any material biodiversity risks. On land-related risks, Eauxwell will acquire all the Project’s 73 mini grid sites from private owners via willing buyer-willing seller agreements. All land triggering physical or economic displacement will be avoided. There will be no additional land acquisition for the distribution lines, which will be laid along the existing road servitudes. All future land acquisition will comply with IFC PS. These commitments will be achieved by implementation of the Land Acquisition Procedure required in ESAP #1 above.
Management Programs: Eauxwell has established a range of E&S procedures, and plans intended to support implementation of its environmental and social management system across mini-grid development, construction, operation, and maintenance activities. Some of the procedures and plans already listed under the ESMS above align with PS requirements, while the identified gaps as well as required updates are discussed in relevant topical sections and are reflected in ESAP #1.
Organizational Capacity and Competency: Eauxwell retains an Environment, Social and Governance (ESG) Manager and a Gender Focal Person to oversee the HSE function. HSE officers and site HSE managers are engaged as needed at construction and operational sites and embedded within engineering and project execution teams. Eauxwell works with a local partner, Offgrid Energy, for community engagement and stakeholder interface. To adequately address the inherent project E&S risks, the Company will (i) recruit dedicated E&S staff sufficient to manage risks across the full portfolio of 73 sites; and (ii) develop and implement an E&S training program for all workers, including contractor workers (ESAP #3).
Emergency Preparedness and Response: Eauxwell has established a corporate-level Emergency Response Plan (ERP), which outlines procedures for emergency scenarios including fire, medical emergencies, evacuations, chemical and fuel spills, power loss and security emergencies. Roles and responsibilities for emergency response are defined. Emergency contact information and records of fire drills and training exercises are displayed at the visited sites. The ERP update under ESAP #1, will include introduction of : (i) site-specific emergency scenarios such as electrical hazards, battery fires, medical emergencies and security incidents; (ii) defined emergency response teams with clearly assigned roles and back-up responsibilities; (iii) engagement with local emergency services and community structures in planning and drills; (iv) provisions for climate-related events including heavy rains, floods and heatwaves given the operating environment; (v) regular monitoring, inspection and maintenance of emergency response equipment; and (vi) periodic training for employees and contractors on emergency response procedures.
Supply Chain: Eauxwell procures solar PV panels, batteries and associated equipment from Tier 1 suppliers. The Company has established a Procurement Policy and a Supplier Code of Conduct prohibiting forced and child labour and includes key environmental, health and safety requirements. Vendors undergo a pre-qualification process evaluating compliance with E&S, labour and HSE criteria. Supplier contracts include clauses requiring compliance with the Code of Conduct. To ensure consistent implementation of the Procurement Policy commitments beyond the Supplier Code of Conduct, the supply chain due diligence procedure to be developed per ESAP #1 will include provisions for a supplier risk mapping and prioritization, periodic monitoring and verification of compliance, specific screening for forced and child labour risks in the upstream solar PV and battery supply chains and corrective action procedures for non-compliance in line with IFC PS2.
Monitoring and Review: Monitoring and reporting provisions are embedded within the ESMS, ESMP and ESG Compliance Plan, defining requirements, responsibilities and KPIs. Monitoring activities take place at the site level, with HSE personnel engaged and E&S performance being recorded. However, there is limited evidence of how monitoring data and site-level information are consolidated and reviewed at the corporate level. As required in ESAP #1 above, the E&S Monitoring and Reporting Procedure will include defined E&S performance indicators or KPIs; centralized tracking of incidents, grievances, training, inspections, non-conformances, or corrective actions; periodic internal E&S audits or formal ESMS review processes; management-level review of E&S performance trends; documented use of monitoring results to update procedures, risk assessments, or management plans. The Procedure will also include issues related to land acquisition and use, both from internal monitoring and external stakeholders (including external grievances raised).
PS2: Labor and Working Condition:
Eauxwell's total workforce at the time of appraisal comprises approximately 208 personnel: 123 direct and 85 contracted workers. Each new mini-grid site is expected to engage approximately 31 workers (6 direct, 25 contracted) during construction. Female workers are approximately 13% of the total workforce and 45% at management and senior levels. When all 73 mini grids are operational, the workforce is projected to grow substantially.
Human Resources (HR) Policies and Procedures: Eauxwell has established a Human Resources (HR) management framework supported by a Staff Policies and Procedures Manual, Labour Management Plan (LMP), Contractor's Labour Management Procedure, Codes of Conduct for workers and partners, an Ethics Charter, an Anti-Harassment and Discrimination Policy, a Diversity, Equity and Inclusion Policy, a Workers' Welfare Policy, a Sexual Exploitation, Abuse and Harassment (SEAH) Policy and an Anti-Bribery and Corruption Policy. These documents define labour management policies and are aligned with IFC PS2 and Nigerian labour law.
Working Conditions and Terms of Employment: Standard working hours follow the Nigerian law. Leave entitlements include annual, sick, maternity and compassionate leave; and employee benefits for direct workers include pension contributions, health and group life insurance. Special provisions are made for pregnant workers, including risk assessments and maternity leave in accordance with national law. The Company maintains a Fitness for Work Policy and a Drug, Alcohol and Firearms Policy, prohibiting substance use or possession on any company premises. Employment contracts are in use for workers across categories. The Contractor's LMP requires formal employment arrangements for all workers engaged by contractors and subcontractors, with clearly defined roles, responsibilities, wages and working conditions. Recruitment processes include age and identity verification, reference checks and induction training covering workers' rights and responsibilities. The minimum employment age of 18 years is enforced in policy and practice. New employees and contractors receive a mandatory induction on health, safety and community awareness prior to commencing work. Although Eauxwell employees are not currently members of a labour union, corporate policies explicitly cover and commit to the right to freedom of association and collective bargaining.
Grievance Mechanism: Eauxwell has a structured worker grievance mechanism accessible to all workers, including third party workers. The mechanism is supported by a dedicated Worker Grievance Complaint Form, a grievance register and reporting channels including direct reporting to supervisors, written complaint forms and escalation pathways. Protections for confidentiality, anonymous reporting and against retaliation are incorporated. The Gender Focal Point handles sensitive grievances including GBV/SEAH matters, with confidentiality protections. For effective tracking and management of grievances, Eauxwell will establish a centralized grievance tracking system covering worker grievances across all sites and will produce periodic aggregated reports for management review (ESAP #4).
Occupational, Health and Safety (OHS): The key OHS risks in this project include electric shock and arc flashes, battery fires or explosions, falls from heights, heat stress, manual handling injuries, excavation accidents, and vehicle incidents. Eauxwell has a structured OHS framework comprising an HSE Policy, HSE Management Plan, safe work procedures, a Permit to Work (PTW) system for high-risk activities, incident reporting templates and emergency preparedness arrangements. Implementation is evidenced through training plans, toolbox talks, safety briefings, site inspections, emergency drills and active HSE personnel presence at sites. Health surveillance includes pre-employment medicals, fitness-for-work evaluations and a medical retainer providing access to off-site emergency care. To improve OHS management and performance monitoring, Eauxwell will i) integrate procedures for electrical safety and for safe installation and servicing of power distribution network in compliance with WBG General EHS Guidelines and EHS Guidelines for Electric Power Transmission and Distribution into the HSE Management Plan; and ii) develop corporate and site-level OHS key performance indicators in line with IFC PS and establish an effective performance tracking structure (ESAP #5).
Workers Engaged by Third Parties: Eauxwell engages contractors for construction and installation activities, including installation of solar panels, stringing and routing of cables, electrical connections and terminations, as well as system earthing and grounding. The Company has established a framework for managing contractors and subcontractors, including a Code of Conduct for Partners, a Contractor's Labour Management Procedure and a Contractor Management Framework. The documents set requirements for ethical conduct, labour standards, OHS compliance and grievance mechanisms, extending obligations to contractors' own workers and sub-subcontractors. Minimum E&S selection and monitoring requirements are specified. Eauxwell audits contractors to verify that third-party workers are treated in accordance with corporate HR policies. The update to the Contractor Labor Management Procedure, per ESAP #1, will ensure there is a consistent approach to monitoring, auditing and verifying contractor compliance across the operations.
PS 3 Resource Efficiency and Pollution Prevention
Water and Energy use. Water resource needs during construction and operations will be limited, primarily for periodic cleaning of solar panels, construction activities (e.g. dust suppression) and workers’ welfare – with supply from site boreholes for independent mini-grid sites, and clients’ water supply systems for sites build within client premises. Energy use during construction is associated with transportation, logistics and equipment deployment, which are temporary and limited in scale. During operations, the Company's mini-grid systems will rely primarily on solar generation with battery storage, supplemented by backup diesel to ensure system reliability during periods of low solar generation or peak demand. The E&S monitoring and reporting procedure required per ESAP #1 above will include water and diesel consumption monitoring.
Air Emissions and Greenhouse Gases: The operations at the solar mini-grid sites are expected to produce minimal air emissions during the operational phase. However, site construction activities and transportation associated with the projects may generate dust and vehicle emissions, which will be managed through the site-specific ESMPs. Greenhouse gas (GHG) emissions are expected to be limited and primarily associated with construction activities and occasional operation of back-up generators. Annual GHG emissions are expected to remain below 25,000 tons of CO2 equivalent (tCO2eq/year).
Wastewater. Wastewater from the washing of solar panels using biodegradable soaps drains into the soils on-site. The project sites have ventilated improved pit (VIP) latrines which can be emptied by a sewerage contractor when required, for offsite disposal. The latrines are sited at least 30 meters from known water sources and do not reach the groundwater table to avoid microbial contamination. Given that these are occasionally used by the few staff who visit or operate these sites, soil and groundwater pollution related to their usage is not expected to be material.
Hazardous Materials and Waste Management: Main waste generated at the mini-grid sites includes construction waste (i.e., wood, concrete, packaging material, metal scrap), domestic waste (particularly food waste and plastic water sachets used by the project workers), used batteries and damaged PV modules and electronics. Eauxwell has established a Site Waste Management Plan, and Waste Management and Decommissioning Procedures that include waste minimization, segregation, reuse, recycling and disposal through licensed contractors; and require that appropriately licensed waste management companies are engaged in the collection and disposal of various waste streams, including the used batteries and damaged PV modules and electronics, as required in the WBG EHS Guidelines. The overall volumes generated by each mini-grid site during both construction and operations phases are minimal and expected to remain as such. Hazardous materials handled at the solar mini-grid sites include batteries (e.g., lead acid or lithium-ion), electronic parts (e-waste), and diesel fuel. No documentation was provided related to hazardous material inventory, staff training on hazardous materials, or emergency response measures in the event of leaks or spills. Procedural frameworks (Waste Management and Decommissioning Procedures and a PV Panel Handling and Disposal SOP) define requirements for safe handling, storage, transport and disposal of hazardous materials. Material Safety Data Sheets are maintained and accessible to project managers. To effectively implement the provisions in the procedures above, the Company will formalize agreements with waste management companies and document waste transfer and disposal process to ensure compliance with the Waste Management Plan, national regulatory requirements and IFC PS3 at all Project sites (ESAP #6).
PS4 Community Health, Safety and Security
Infrastructure and Equipment Design and Safety: Risks associated with battery energy storage systems and the distribution network include fire, electrocution, pole collapse, falling conductors, and public exposure to energized equipment. To mitigate these risks, the Company designs, installs and operates the mini-grids and power distribution system in line with the Nigeria Electricity Distribution Code and Nigerian Electricity Supply and Installation Standards, and has obtained requisite regulatory approvals. In addition, the Company undertakes routine inspection and maintenance of the mini-grid infrastructure and distribution network and conducts community sensitizations on electrical safety within the catchment communities.
Road Safety & Traffic Management: The transportation of mini-grid components and equipment to the site and staff movements to and from site represents the key safety risk to workers, other road users and communities adjacent to the roads being used. Eauxwell has established basic operational controls for transport and logistics management, supported by HSE procedures, toolbox talks and a Journey Management Form. However, a formalized Traffic and Road Safety Management framework is not yet in place. No related incidents or accidents were reported at the sites visited. Per ESAP #1 above, The Company will develop a Road Transport Safety Management Procedure designed to identify, assess, mitigate, monitor, and continuously improve road transport risks associated with the company activities. The Procedure will establish driver competency and fatigue management requirements, vehicle and journey management and maintenance programs, and contractor transport performance. The Procedure will also include a clear external grievance management protocol, including for transport related GBV cases. This Procedure will be adopted and implemented at all sites.
Security Management: Each Eauxwell mini-grid site is fenced off with a single controlled access point and access control and security is provided on a need/on call basis by two unarmed, locally employed security guards. Considering the broader security context in some of the regions where the project sites are located, the company will undertake a security risk assessment of all its Project sites and develop a Security Management Procedure (as required in ESAP #1) to support the safe and secure development and operations of the Project, in line with IFC PS4 requirements.
