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 - Social and Environmental Assessment and Management Systems:
E&S Policy
MUL has adopted a corporate Environmental and Social (E&S) Policy applicable to all offices, operational facilities, and project sites. The Policy forms part of MUL’s Integrated Management System (IMS), aligned with ISO 9001, ISO 14001, ISO 45001 and ISO 26000, and reflects the Company’s commitment to environmental protection, resource conservation, occupational health and safety, and social responsibility across its investments and operations. MUL’s corporate E&S Policy is broadly aligned with international standards; however, IFC’s appraisal identified the need for formal updates to explicitly reference all applicable IFC PSs and to ensure consistent application across all project companies. In addition, selected procedures require strengthening to better align with IFC PS1 requirements and to more clearly cascade E&S obligations to contractors and suppliers. As part of ESAP #1, MUL will update the E&S Policy to be in full alignment with the IFC Performance Standards.
Identification of E&S Risks and Impacts
E&S risks and impacts are identified during project planning and development and inform the preparation of project specific assessments and management plans. MUL has an established Environmental Aspects and Impacts Identification procedure aligned with ISO 14001; however, based on available information, the procedure is not yet fully aligned with IFC Performance Standard 1, primarily related to the depth and consistency of risk identification, explicit application of the mitigation hierarchy, and uniform implementation across the full project lifecycle; these gaps are procedural and are being addressed through time bound ESAP #2.
IFC has reviewed ESIAs and construction E&S management plans (CESMPs) for selected MUL projects, including the WAVE Project (UAE) and the Zrenjanin WWTP Project (Serbia), which were prepared by qualified consultants and demonstrate alignment with national regulatory requirements and IFC Performance Standards. For the Zrenjanin WWTP, a national EIA was completed and approved in June 2022. MUL will request its WWTP Zrenjanin project company (Begej Water d.o.o.) to develop a project level ESMS and CESMP consistent with the MUL corporate ESMS and IFC PS1, and that contractors and subcontractors adopt and implement provisions and requirement of these documents. Additional monitoring requirements mandates under national permitting, including construction and operational noise monitoring, will be implemented.
E&S Management Systems & Programs
MUL operates a corporate ESMS aligned with IFC Performance Standards, WBG EHS Guidelines, and Good International Industry Practice (GIIP). This framework applies consistently across all business units and subsidiaries, ensuring systematic management of environmental and social risks throughout project development and operations.
An ESMS Manual (2025) defines policies, procedures, roles, and oversight mechanisms as part of MUL’s broader ESG strategy. The system is periodically reviewed to drive continuous improvement. At the project level, Environmental and Social Management Plans (ESMPs) — including Construction ESMPs — are developed in accordance with the corporate ESMS and tailored to site specific risks. Implementation is overseen by dedicated site E&S personnel, with overall accountability resting with the Corporate QHSE Manager.
MUL operates ISO 14001 and ISO 45001/OHSAS certified management systems at the group level and for several operating companies. Not all project companies hold individual ISO certification; however, all are required to operate in accordance with MUL group policies and procedures.
E&S Organizational Capacity/Competency and E&S Training
E&S management is implemented through a two tier structure comprising corporate oversight and project level implementation. The Corporate QHSE & Sustainability function is responsible for development, oversight, and continuous improvement of the ESMS, while departmental heads ensure integration of E&S requirements into their respective functions. Currently QHSE & Sustainability function is managed by Corporate QHSE Manager and supported by Corporate QHSE (ESG) Specialist. At the project level, Project Managers and O&M Managers designate site specific E&S focal points responsible for implementation, monitoring, and reporting (QHSE representatives are deployed across all Business Units and project sites (currently covering 7 Business Units and 2 active projects), ensuring implementation, monitoring, and reporting at the operational level). For project-specific ESG requirements, MUL engages qualified third-party ESG consultants to support environmental and social impact assessments, management plans, and specialized studies, as required. Contractors must demonstrate adequate capacity and ensure alignment with MUL’s ESMS requirements. Both employees and contractors receive regular E&S and OHS training in accordance with applicable regulations. Periodic internal audits are conducted by MUL’s corporate E&S function to assess compliance and performance.
Emergency Preparedness and Response
MUL has established a corporate Emergency Preparedness and Response framework applicable to all operations, employees, and contractors. The framework addresses environmental incidents, occupational and public safety events, natural hazards, fires, chemical spills, and operational failures and is aligned with ISO 9001, ISO 14001, and ISO 45001 requirements. As part of the ESAP #3, MUL will refine emergency response procedures to explicitly cover typical WTP and WWTP emergency scenarios, including power outages, equipment failure, flooding, and uncontrolled releases.
E&S Monitoring and Review
In line with IFC PS1, MUL monitors and reviews E&S performance through routine inspections, performance reporting, internal audits, and corrective action tracking. Monitoring covers regulatory compliance, environmental performance indicators, labor and OHS performance, and community health and safety. The Corporate QHSE Manager undertakes periodic reviews of project performance, and monitoring outcomes to inform management decision making and continuous improvement.
Supply Chain Risk Assessment and Management
Supply chain risk management is incorporated into MUL’s IMS through procedures governing externally provided processes, products, and services. Supply chain risks for water and wastewater projects are considered moderate and primarily related to labor, OHS, and E&S practices of contractors and service providers. i.e. (i) contractor and subcontractor E&S performance (labor & OHS risks (PS2) - unsafe work practices, weak oversight of migrant labor, inadequate training; environmental risks (PS3/PS4) - improper chemical handling, spill prevention failures, unsafe sludge transport/disposal; reputational risk to lenders if third party incidents occur., (ii) chemical supply and handling risks (hazardous and semi hazardous treatment chemicals (e.g. chlorine, coagulants, polymers) - risks arise from storage, transport, supplier practices, and emergency preparedness, (iii) sludge management and waste disposal services. As part of ESAP #4, MUL will further align procurement and supplier requirements with IFC PS1 and PS2, including through contractual provisions and supplier codes of conduct, as appropriate to the sector.
Contractors and Sub-contractors Management
MUL requires contractors and subcontractors to comply with applicable national law and MUL’s E&S requirements through contractual EHS provisions. Contractors are required to prepare and implement risk appropriate E&S documentation, including CESMPs, task specific risk assessments, emergency response measures, and waste and hazardous materials controls. Where appropriate, contractors may adopt MUL’s ESMS and project level plans. As part of ESAP #5, MUL will further align contractor contractual requirements with IFC Performance Standards and typical IFC expectations for EPC, construction, and O&M contracts.
PS 2 – Labor and Working Conditions
MUL currently employs approximately 324 direct workers, 83% men and 17% women, across 11 locations in Angola, China, Egypt, Portugal, Rwanda, Saudi Arabia, Serbia, United Arab Emirates and Uzbekistan. All direct workers are employed on a full-time, permanent basis. In 2025, MUL's annual employee turnover rate was 6.2% (1.6% among female employees and 4.6% among male employees), remaining below market levels.
MUL has an established HR policies and procedures framework applicable across all operations and project sites, broadly aligned with IFC PS2 requirements. This includes a Code of Business Conduct, a Fair Labor Practices and Working Conditions Management Plan (Labor Management Plan - LMP), and ESMS procedures. Employment decisions, including recruitment, retention, training, promotion, and termination, are guided exclusively by competence, merit, and qualifications. All workers receive written employment contracts in a language they understand, establishing responsibilities, wages, hours, overtime, benefits, and notice periods. Working hours of direct workers are recorded and comply with national legislation in the jurisdictions where MUL operates.
MUL's labor management system is grounded in an Integrated Management System (IMS), which is active and subject to regular internal and external audits to confirm effectiveness and drive continuous improvement. Performance management is supported by a cloud-based human capital management software suite that helps organizations manage the entire employee lifecycle, from recruitment and onboarding to payroll, performance management, and learning, which has been implemented across the Group. For blue collar workers – defined as manual and operational staff engaged in construction, operation, maintenance, and other site based activities – MUL employs a simplified, paper based performance rating system. Non compliances identified during monitoring are addressed in accordance with the IMS Non Conformance and Corrective Action Procedure. HSE and Environmental, Social, and Governance (ESG) performance are reported on a monthly basis.
At the subsidiary level, Pannonian Water d.o.o (Zrenjanin WTP, Serbia) and Begej Water d.o.o. (Zrenjanin WWTP, Serbia) is governed by a Labor Rulebook, which establishes a standard 40-hour workweek with shift flexibility and a minimum of 20 days of annual leave. To ensure MUL's corporate HR framework applies across all subsidiaries, as per ESAP #6 MUL and project companies will adjust all subsidiary-level HR policies, labor rulebooks, codes of conduct, and grievance procedures with MUL's corporate HR documents, including the Code of Business Conduct, Fair Labor Practices and Working Conditions Management Plan, and the corporate Grievance Mechanism. This alignment exercise will be documented and verified across all operating jurisdictions through IFC supervision activities.
Workers' Organizations
MUL recognizes the right of workers to form or join labor organizations and to participate in collective bargaining. In jurisdictions where such rights are restricted by law, MUL commits to providing alternative means of dialogue, including direct engagement with HR and access to the company’s grievance mechanism. At Pannonian Water d.o.o (Zrenjanin WTP, Serbia) and Begej Water d.o.o. (WWTP, Zrenjanin, Serbia)), the Labor Rulebook allows the employer to unilaterally regulate employment conditions in the absence of a collective agreement (e.g. where no representative trade union or negotiations have failed). This provision does not limit rights afforded under Serbian law and is subject to strict legal limits. In line with ESAP #6, MUL will align all subsidiaries’ HR policies with the corporate HR documents to ensure they explicitly guarantee workers’ rights to union membership in collective bargaining activities.
Non-Discrimination and Equal Opportunity
MUL's Code of Business Conduct prohibits discrimination on the basis of nationality, language, religion, race, culture, gender, and age. Equal opportunity principles are applied throughout the employment lifecycle. Retaliation against workers who submit grievances is strictly prohibited under MUL's corporate framework. For example, at Pannonian Water d.o.o (Zrenjanin WTP, Serbia) and Begej Water (WWTP, Serbia), while no explicit non-discrimination clause exists in the local Labor Rulebook, workers are protected under the Serbian Labor Act, which requires employees to treat each other politely and with respect. In accordance with ESAP #6, MUL’s updated HR policies will prohibit discrimination and guarantee equal opportunities for all workers.
Gender and Gender-Based Violence and Harassment (GBVH)
MUL's Code of Business Conduct and LMP commit to a harassment-free work environment and include a zero-tolerance policy on GBVH. Grievances related to GBVH are classified as high-risk, must be acknowledged within 24 hours, and are handled with survivor-centered principles by trained personnel. To more comprehensively address GBVH, MUL will appoint a dedicated GBVH focal point at the corporate level, to handle the reporting and management of GBVH cases across all project sites (ESAP #7). MUL will also design and deliver specialized training for managers, HR personnel, and all staff involved in grievance investigations. Training records will be maintained and refresher sessions provided on an annual basis.
Workers' Grievance Mechanism
MUL has established a workers’ grievance mechanism, which includes multiple submission channels such as toll-free hotlines, email, physical complaint boxes, and verbal reporting to HR or the Community Liaison Officer. The GM is designed to receive anonymous submissions. Acknowledgment is required within two working days, with initial assessment within five days, resolution within ten days, and final closure within twenty days. GBVH-related grievances are subject to the accelerated 24-hour acknowledgment timeline and handled with strict confidentiality. The grievance mechanism and all associated labor management standards are applicable to all employees (including direct and contracted workers) across MUL's operations.
Workers Engaged by Third Parties
MUL conducts due diligence on contractors and primary suppliers prior to engagement following a set of specific and clearly defined criteria. Labor compliance clauses, covering working conditions, OHS controls, and GBVH prevention, are incorporated into all contracts. Contractors are required to submit HSE Management Plans and periodic performance reports, and MUL monitors compliance through KPIs, internal audits, and site inspections.
Occupational Health and Safety
MUL maintains a comprehensive corporate Health and Safety Policy and an Occupational Health and Safety (OHS) Management Plan, outlining principles applicable to both direct workers and contractors. QHSE Managers and HSE Engineers are responsible for oversight and monitoring of compliance, which is tracked through the Integrated Management System (IMS). Quarterly internal audits are conducted by the HSE team and complemented by periodic external audits.
Site-specific emergency response plans address fire events, natural disasters, medical emergencies, and security incidents. Security personnel and contractors are required to participate in mock drills and receive first-aid training.
IFC reviewed the Operations and Maintenance (O&M) monthly operating plans, including summaries of E&S performance, for the period July 2025 to December 2025, covering eight water and wastewater facilities that are either operational or under construction. Overall E&S performance across the portfolio was assessed as generally satisfactory, with limited lost time injuries reported. An exception was identified at one sewage treatment plant (STP) project under construction where two work-related fatalities and a small number of other serious incidents occurred during 2025. All incidents (including the fatalities) were related to employees of the subcontractors of the EPC contractor. Following these incidents, the project company and the EPC joint venture undertook internal reviews, identified and implemented immediate corrective and preventive measures to enhance occupational health and safety management and site level oversight. In response, the MUL Board directed the project company to assess additional measures to strengthen onsite HSE supervision. In line with ESAP #8, MUL and the relevant project companies will review and, where necessary, update project level OHS management plans to ensure alignment with local regulatory requirements, MUL’s corporate HSE framework, and IFC Performance Standard 2 (PS2), applicable to direct employees and subcontracted workers.
PS3 - Pollution Prevention and Abatement
Treatment solutions are selected on a project specific basis and may include conventional and advanced biological treatment systems, membrane technologies, and desalination processes, designed to ensure reliable treatment performance, resource efficiency, and environmental protection. Key PS3 risks include resource efficiency (energy and water use), wastewater treatment performance, sludge and waste management, hazardous materials handling, and control of emissions, effluents, and waste during construction and operation.
MUL promotes the efficient use of energy and water through appropriate technology selection, process optimization, and operational controls. Construction activities are not energy intensive and primarily involve temporary fuel use for equipment and generators. During operations, energy consumption is mainly electricity sourced from national grids, with limited direct combustion sources.
Project level ESIAs include GHG assessments covering Scope 1 and Scope 2 emissions. GHG emissions from MUL projects are moderate in absolute terms and primarily associated with electricity consumption during operations. While individual assets are generally below IFC materiality thresholds, combined portfolio emissions exceed 25,000 tCO2e per year. Accordingly, MUL will monitor and report aggregated GHG emissions and avoided emissions using internationally recognized methodologies and will evaluate technically and financially feasible mitigation opportunities, including energy efficiency improvements and potential energy recovery at WWTPs, in line with IFC PS3.
Air Emissions, Noise and Odour Management Plan
Air emissions associated with MUL projects are limited and primarily related to construction dust, generator exhaust, and operational odour typical of wastewater treatment. These impacts are managed through project specific controls implemented under construction and operational ESMPs, consistent with national standards and WBG General EHS Guidelines. Odour management measures include operational optimization and, where required, physical containment and treatment systems. Noise and vibration from construction activities and stationary equipment during operation are managed through scheduling, equipment controls, and monitoring, with compliance ensured against applicable national limits and WBG EHS Guidelines.
Soil, Groundwater, Surface Water and Stormwater Protection
MUL manages risks to soil and water resources through project specific management plans implemented under the ESMS. During construction, measures are applied to prevent erosion, sediment runoff, and contamination from spills or improper waste handling. During operation, controls focus on preventing leaks from treatment units, sludge handling areas, and chemical storage, and managing stormwater runoff from facility areas. These measures are designed to protect groundwater and surface water bodies and to ensure compliant discharge of treated effluent, consistent with IFC PS3 and WBG EHS Guidelines.
Waste and Sludge Management
Waste management is addressed through MUL’s ESMS and ISO 14001 aligned environmental management system and implemented primarily via project level Waste Management Plans covering both construction and operations. Waste streams include construction waste, operational solid waste, treatment residuals, and sludge. WWTPs operated by MUL are equipped with sludge thickening and dewatering facilities. Sludge management responsibilities are defined in concession agreements and involve disposal at licensed facilities or transfer to municipal authorities. MUL works with clients and authorities to ensure sludge handling and disposal are carried out in accordance with regulatory requirements and good international industry practice.
Hazardous materials management
Hazardous materials (e.g., treatment chemicals, fuels, lubricants) are managed through site specific procedures under the ESMS, aligned with WBG EHS Guidelines. Controls include inventory management, appropriate storage and secondary containment, safe handling procedures, spill prevention and response measures, and the use of licensed contractors for transport and disposal. These measures are applied during both construction and operation phases.
Water and Wastewater Treatment
MUL employs established and internationally recognized water and wastewater treatment technologies selected based on influent quality, effluent or reuse standards, energy efficiency, lifecycle cost, site conditions, and climate considerations. Potable water supplied by MUL projects meets applicable national and WHO drinking water standards. Wastewater treatment typically includes conventional or advanced biological processes, with tertiary treatment where reuse is required. Treated effluent is designed to comply with applicable national discharge standards and relevant WBG EHS benchmarks. MUL has procedures in place to manage deviations in influent quality, including operational adjustments, investigation of causes, engagement with upstream dischargers, and coordination with authorities, to prevent non compliant effluent discharge.
PS 4 – Community Health, Safety, and Security
Infrastructure and Equipment Design and Safety
Infrastructure and equipment safety requirements are embedded within MUL’s corporate ESMS, OHS management plans, and enforced contractually through EPC and O&M agreements.
MUL applies GIIP and IFC PS4 requirements to the design and operation of its facilities, incorporating safety by design measures, controlled access, mechanical and electrical safeguards, fire and emergency response systems, and integration with traffic and security management plans to protect workers, communities, and third parties from infrastructure and equipment related hazards
Traffic Impacts and Transportation Safety
MUL’s corporate Traffic Management Plan (TMP) applies across all operations and subsidiaries and covers all project related vehicle movements during construction, operation, and maintenance, both on and off site and on public roads. The TMP is aligned with ISO 9001, ISO 14001, ISO 45001, ISO 26000, and IFC Performance Standard 4 (PS4), and addresses the transport of materials, chemicals, fuel, sludge, waste, equipment, personnel, and contractor movements across internal plant traffic and external haul routes. It establishes key safety controls, including approved haul routes avoiding sensitive receptors, enforced low speed limits, zero tolerance for alcohol, drugs, and mobile phone use, suspension of traffic under low visibility or adverse road conditions, advance notice of road closures, protection of emergency access, and timely investigation of traffic related community complaints. While the corporate TMP provides an adequate overarching framework, site specific TMPs reflecting local road conditions and community context have not yet been developed; in line with ESAP #9, MUL will prepare and implement site specific TMPs for all construction and operational sites, informed by traffic risk assessments and updated as conditions change.
Hazardous Materials Management and Safety
Transport of hazardous materials, including chemicals, sludge, and grit, is governed by applicable national ADR regulations and IFC PS4 requirements. Materials must be stored in labeled, sealed containers, and vehicles must carry spill kits. Overloading is prohibited. Transport is restricted to daylight hours unless approved by the O&M Manager. Access controls prevent the entry of contraband, and a no-smoking and no-cooking policy applies across all project sites and project vehicles.
Community Exposure to Disease and GBVH
MUL manages risks related to community exposure to communicable diseases and gender based violence and harassment (GBVH) through its corporate Security Code of Conduct, site level security arrangements, and grievance management systems. Personnel interacting with communities are required to demonstrate professional, culturally sensitive conduct and non discrimination. All allegations of GBVH involving community members are classified as high risk, subject to immediate escalation, and handled confidentially using a survivor centered approach. Communication and engagement methods are designed to account for gender, language, culture, literacy, and disability to ensure accessibility and inclusion. GBVH related community grievances are acknowledged within 24 hours and managed through dedicated procedures, with zero tolerance for retaliation.
Emergency Preparedness and Response
Emergency response plans covering fires, natural disasters, medical emergencies, and security breaches are developed and maintained by QHSE Managers and HSE Engineers at each site. Security staff and contractors are required to participate in mock drills and maintain certification in basic first aid and mustering/shelter-in-place procedures. HSE Officers coordinate with external emergency services and, in the event of a road traffic accident involving a project vehicle, the Emergency Response Plan is activated immediately.
Security Personnel
MUL’s Security Management Plan (SMP) requires site security infrastructure to include perimeter fencing, 24/7 manned guard posts, CCTV, and protective lighting. MUL engages licensed third party security providers based on site specific risk assessments. Security personnel are vetted prior to engagement, including criminal record checks, police verification, and fitness certification, and are trained in access control, emergency response, conduct standards, and graduated use of force protocols. Use of force follows a graded escalation approach, and any incidents are documented and reported to project management and the Corporate QHSE function. Deployment of armed security is restricted to high risk locations and requires senior management approval. Security related community grievances are managed through the corporate grievance mechanism, with allegations of misconduct investigated within defined timeframes. MUL has a corporate Security Management Plan; however, site specific Security Management Plans (SMPs) have not yet been developed. As part of ESAP #10, MUL will prepare and implement sites specific SMPs aligned with IFC PS4 and the Voluntary Principles on Security and Human Rights, including explicit linkage to the grievance mechanism and periodic review.
PS5 - Land Acquisition and Involuntary Resettlement
MUL and its project companies remain responsible for ensuring that land acquisition outcomes comply with IFC PS5, including verification of adequate compensation and livelihood restoration and management of any temporary land access or construction related impacts. MUL‘s Land Acquisition and Resettlement Management Plan (LARMP) is aligned IFC PS5 and applies to all MUL’s construction projects requiring land acquisition, expansions or modifications of operational assets, temporary land use during construction (e.g., laydown areas, access roads), government-led land acquisition where Metito Utilities is a beneficiary, economic displacement without physical relocation (e.g., loss of income sources), and associated facilities where MUL has influence.
