Environmental & Social Review Summary
Project Number
9620
Company Name
AES Telasi JSC
Date ESRS Disclosed
Feb 5, 2010
Country
Georgia
Region
Europe
Last Updated Date
Jan 2, 2017
Environmental Category
B - Limited
Status
Completed
Previous Events
Approved : Dec 29, 1999
Signed : Dec 30, 1999
Invested : Jun 9, 2000
Sector
Distribution Business
Industry
Infrastructure
Department
Regional Industry INF LAC & EUR
Project Description
- 4 - November 24, 1999
International Finance Corporation
A Member of the World Bank Group
International Finance Corporation
A Member of the World Bank Group
Environmental Review Summary (ERS)
Project Name Georgia - Telasi
Region Europe
Sector Infrastructure
Project No. 009620
1. The government of Georgia issued a competitive tender in July 1998 for 75% of the shares in the electrical distribution company (“Telasi”) of the city of Tblisi and the surrounding area (370,000 customers). JSC AES Telasi (“AES”), a subsidiary of AES Silk Road Holdings, B.V., won the tender in November 1998 and the formal completion date was January 4, 1999. AES has requested the IFC’s participation in financing the project which includes protection and rehabilitation of existing fixed assets to increase reliability and reduce technical losses, improve billing an dinernal control systems to increase collections and reduce non-technical losses, improve metering to provide more accurate information on power received and sold by Telasi, and reorganization costs, including rationalization and retraining of workforce. IFC is considering an A loan totaling US$30 million.
2. This is a category B project according to IFC’s environmental and social review procedure because specific impacts may result which can be avoided or mitigate by adhering to generally recognized performance standards, guidelines, or design criteria. The review of this project consisted of appraising technical , environmental, and social information submitted by the project sponsor, as well as a site review by IFC’s technical staff. The following potential environmental, health, safety and social impacts of the project were identified:
· Handling and storage of fuels and chemicals;
· Solid and liquid waste management;
· Confirmation that dielectric fluid do not contain PCBs;
· Phase out of CFC’s including Halons;
· Worker health and training programs;
· Management of land acquisition and economic displacement of people associated with the siting and right-of-way alignment for new facilities; and
· Retrenchment/downsizing of labor force;
3. The sponsor has presented information either documenting that the impacts do not exist or plans to address these issues. The sponsor has demonstrated that the proposed project will comply with applicable Georgian and World Bank Group requirements. The information provided about how these potential impacts are addressed in the development of the project is summarized in the paragraphs that follow.
4. The Telasi system distributes power to the City of Tbilisi. It services approximately 1,300 industrial customers, 20,000 commercial and industrial customers and 348,000 residential customers. In addition, it supplies power for municipal services (e.g., streetlights, water supply, and bus stations). Telasi purchases power from the State-run power generation entity from four major substations in Tbilisi. From these substations, AES Telasi distributes power using its network of substations and transmission lines. The system primarily consists of the following assets:
· 37 major substations (110/35kV);
· 1400 substations of approximately 6/10kV to 0.4kV;
· 2158 km of transmission lines/cables;
· 10 administrative garages;
· transformer repair shops; and
· a fleet of cars, trucks and cranes.
5. The majority of the system is underground with buried cable. The first substation was built in 1927, however, most of the other transmission substations were constructed in the 1960’s and 1970’s. The system is not located in any national parks or environmentally sensitive areas. The setting ranges from heavily industrialized to rural. AES Telasi retained ENSR to conduct an environmental evaluation of the Telasi system, which took place in February and March of 1999. The purpose of the study was to evaluate compliance and to identify any hazardous substances and associated remedial actions.
6. The dielectric fluid is stored and filtered at above ground and underground tanks at the Vani Street complex and formerly at underground tanks at the Lilo complex, which is to be closed down. According to the ENSR report the primary chemicals used, handled and stored are dielectric fluid, battery acid and gasoline. There was evidence of past spills and active leaks at the substations which has contaminated soil and potentially contaminated groundwater. Most of the substations have a battery room with open-top batteries. Deionized water is used to replenish the batteries, which are continuously charged. There is evidence of spilled battery fluid on the concrete battery room floors. Fire fighting equipment is under review at each station but an order of approximately US$30,000 has been placed for emergency equipment. Telasi has closed down its two vehicle refueling stations - Lilo and Vani Street complexes. The Vani Street site was discontinued in August of 1999 and is being assessed for suitability as a fuel oil storage point. The Lilo complex has two, and possibly three, underground storage tanks. It is suspected that an underground tank at the Lilo complex is leaking. The Vani Street complex tanks are above ground and located within a concrete building, which will be demolished and cleaned up. One of the actions in the Environmental Action Plan (EAP) is to identify active leaks, stop them and to remove underground storage tanks and piping, unused electrical equipment, leaking transformers and vehicle repair pits and remediation of all areas. Additional research will be conducted to determine whether groundwater is used for potable purposes and if so evaluate the extent of contamination, if any, in the groundwater. The EAP calls for a review of the existing storage tanks and upgrade of secondary containment until the storage of fuel and oil can be eliminated from Telasi properties.
7. ENSR analyzed two samples of dielectric fluid – one of relatively new/fresh fluid and one of used fluid. The sample of used oil showed polychlorinated biphenyl’s (PCBs) but at low levels (less than 50 ppm). PCBs in the new oil were below the method detection limit. In the future, all tender specifications for purchasing oils will include the requirement of being free of PCBs. In addition, when oil is changed in transformers, it will be analyzed for PCBs and if PCBs are detected above 50ppm the oil will be disposed of in an appropriate manner.
8. Solid and liquid waste is limited to paper, scrap metal, electrical equipment, and oily waters from the vehicle maintenance areas. In the past, solid wastes were either burned or sent to municipal landfills. AES has discontinued the practice of burning trash. AES will review the need for the future use of the vehicle maintenance areas and will install oil water separators if they continue to discharge oily waters. As part of the EAP, AES will develop a program to segregate and dispose of solid waste according to type and level of hazard. This plan will be completed by June 2000. AES will also implement a general house keeping program to neaten sites and remove old equipment. This will also be implemented by December 1999.
9. According to AES Telasi there are no CFC’s in the system therefore a phase out plan is not required.
10. Since January 4, 1999, there have been a number of safety incidents. AES Telasi has implemented formal safety training courses initially for all outside workers and those dealing with electricity and materials. About 700 employees have been trained and tested. Four failed and have been taken off active work and will be retested. A number of others received low grades and are only allowed to work under direct supervision. Courses will be extended to cover all staff. AES is also investing US$400,000 in safety equipment, re-organized the safety department, drafted a Safety Procedures Handbook, formed a Health Care Task Force to examine the need for Health Care Insurance, and implemented an Annual Health Physical Program. Locks and lighting have been added to buildings to improve safety and security of employees. The EAP has scheduled the purchase and installation of fire detection systems and fire fighting equipment where necessary by December 2000. An updated Emergency Response Plan is being prepared and negotiations are on-going with local medical centers to deal with major electrical burns.
11. Most staff are members of the Professional Trade Union. A committee of specialists, trade union representatives, and AES Telasi employees was convened which developed a generous Voluntary Selective Severance (VSS) package. All employees who took the VSS package were compensated for unused vacation time in 1999, outstanding holiday pay, and any back wages. In addition, the minimum package, for employees with between 6 months to 11 years service is 12 months salary; for those with 12 to 24 years service, one months salary is given for each year of service; those with 25 years of more are given 36 months salary. The company will also assist with the training courses and exams for who opt for the VSS. Some 760 people have taken the package and left the company. The current number of employees is 1,699. Further reductions in staff are anticipated in April 2000.
12. IFC will monitor ongoing compliance with World Bank Group environmental, health and safety policies and guidelines during the lifetime of the project by evaluating reports submitted annually to IFC by AES Telasi and by conducting periodic supervision.
13. Based on its review of available information regarding potential environmental impacts and proposed mitigation measures, IFC concludes that AES Telasi’s proposed project will meet World Bank Group environmental, health and safety policies and guidelines and host country requirements.
International Finance Corporation
A Member of the World Bank Group
International Finance Corporation
A Member of the World Bank Group
Environmental Review Summary (ERS)
Project Name Georgia - Telasi
Region Europe
Sector Infrastructure
Project No. 009620
1. The government of Georgia issued a competitive tender in July 1998 for 75% of the shares in the electrical distribution company (“Telasi”) of the city of Tblisi and the surrounding area (370,000 customers). JSC AES Telasi (“AES”), a subsidiary of AES Silk Road Holdings, B.V., won the tender in November 1998 and the formal completion date was January 4, 1999. AES has requested the IFC’s participation in financing the project which includes protection and rehabilitation of existing fixed assets to increase reliability and reduce technical losses, improve billing an dinernal control systems to increase collections and reduce non-technical losses, improve metering to provide more accurate information on power received and sold by Telasi, and reorganization costs, including rationalization and retraining of workforce. IFC is considering an A loan totaling US$30 million.
2. This is a category B project according to IFC’s environmental and social review procedure because specific impacts may result which can be avoided or mitigate by adhering to generally recognized performance standards, guidelines, or design criteria. The review of this project consisted of appraising technical , environmental, and social information submitted by the project sponsor, as well as a site review by IFC’s technical staff. The following potential environmental, health, safety and social impacts of the project were identified:
· Handling and storage of fuels and chemicals;
· Solid and liquid waste management;
· Confirmation that dielectric fluid do not contain PCBs;
· Phase out of CFC’s including Halons;
· Worker health and training programs;
· Management of land acquisition and economic displacement of people associated with the siting and right-of-way alignment for new facilities; and
· Retrenchment/downsizing of labor force;
3. The sponsor has presented information either documenting that the impacts do not exist or plans to address these issues. The sponsor has demonstrated that the proposed project will comply with applicable Georgian and World Bank Group requirements. The information provided about how these potential impacts are addressed in the development of the project is summarized in the paragraphs that follow.
4. The Telasi system distributes power to the City of Tbilisi. It services approximately 1,300 industrial customers, 20,000 commercial and industrial customers and 348,000 residential customers. In addition, it supplies power for municipal services (e.g., streetlights, water supply, and bus stations). Telasi purchases power from the State-run power generation entity from four major substations in Tbilisi. From these substations, AES Telasi distributes power using its network of substations and transmission lines. The system primarily consists of the following assets:
· 37 major substations (110/35kV);
· 1400 substations of approximately 6/10kV to 0.4kV;
· 2158 km of transmission lines/cables;
· 10 administrative garages;
· transformer repair shops; and
· a fleet of cars, trucks and cranes.
5. The majority of the system is underground with buried cable. The first substation was built in 1927, however, most of the other transmission substations were constructed in the 1960’s and 1970’s. The system is not located in any national parks or environmentally sensitive areas. The setting ranges from heavily industrialized to rural. AES Telasi retained ENSR to conduct an environmental evaluation of the Telasi system, which took place in February and March of 1999. The purpose of the study was to evaluate compliance and to identify any hazardous substances and associated remedial actions.
6. The dielectric fluid is stored and filtered at above ground and underground tanks at the Vani Street complex and formerly at underground tanks at the Lilo complex, which is to be closed down. According to the ENSR report the primary chemicals used, handled and stored are dielectric fluid, battery acid and gasoline. There was evidence of past spills and active leaks at the substations which has contaminated soil and potentially contaminated groundwater. Most of the substations have a battery room with open-top batteries. Deionized water is used to replenish the batteries, which are continuously charged. There is evidence of spilled battery fluid on the concrete battery room floors. Fire fighting equipment is under review at each station but an order of approximately US$30,000 has been placed for emergency equipment. Telasi has closed down its two vehicle refueling stations - Lilo and Vani Street complexes. The Vani Street site was discontinued in August of 1999 and is being assessed for suitability as a fuel oil storage point. The Lilo complex has two, and possibly three, underground storage tanks. It is suspected that an underground tank at the Lilo complex is leaking. The Vani Street complex tanks are above ground and located within a concrete building, which will be demolished and cleaned up. One of the actions in the Environmental Action Plan (EAP) is to identify active leaks, stop them and to remove underground storage tanks and piping, unused electrical equipment, leaking transformers and vehicle repair pits and remediation of all areas. Additional research will be conducted to determine whether groundwater is used for potable purposes and if so evaluate the extent of contamination, if any, in the groundwater. The EAP calls for a review of the existing storage tanks and upgrade of secondary containment until the storage of fuel and oil can be eliminated from Telasi properties.
7. ENSR analyzed two samples of dielectric fluid – one of relatively new/fresh fluid and one of used fluid. The sample of used oil showed polychlorinated biphenyl’s (PCBs) but at low levels (less than 50 ppm). PCBs in the new oil were below the method detection limit. In the future, all tender specifications for purchasing oils will include the requirement of being free of PCBs. In addition, when oil is changed in transformers, it will be analyzed for PCBs and if PCBs are detected above 50ppm the oil will be disposed of in an appropriate manner.
8. Solid and liquid waste is limited to paper, scrap metal, electrical equipment, and oily waters from the vehicle maintenance areas. In the past, solid wastes were either burned or sent to municipal landfills. AES has discontinued the practice of burning trash. AES will review the need for the future use of the vehicle maintenance areas and will install oil water separators if they continue to discharge oily waters. As part of the EAP, AES will develop a program to segregate and dispose of solid waste according to type and level of hazard. This plan will be completed by June 2000. AES will also implement a general house keeping program to neaten sites and remove old equipment. This will also be implemented by December 1999.
9. According to AES Telasi there are no CFC’s in the system therefore a phase out plan is not required.
10. Since January 4, 1999, there have been a number of safety incidents. AES Telasi has implemented formal safety training courses initially for all outside workers and those dealing with electricity and materials. About 700 employees have been trained and tested. Four failed and have been taken off active work and will be retested. A number of others received low grades and are only allowed to work under direct supervision. Courses will be extended to cover all staff. AES is also investing US$400,000 in safety equipment, re-organized the safety department, drafted a Safety Procedures Handbook, formed a Health Care Task Force to examine the need for Health Care Insurance, and implemented an Annual Health Physical Program. Locks and lighting have been added to buildings to improve safety and security of employees. The EAP has scheduled the purchase and installation of fire detection systems and fire fighting equipment where necessary by December 2000. An updated Emergency Response Plan is being prepared and negotiations are on-going with local medical centers to deal with major electrical burns.
11. Most staff are members of the Professional Trade Union. A committee of specialists, trade union representatives, and AES Telasi employees was convened which developed a generous Voluntary Selective Severance (VSS) package. All employees who took the VSS package were compensated for unused vacation time in 1999, outstanding holiday pay, and any back wages. In addition, the minimum package, for employees with between 6 months to 11 years service is 12 months salary; for those with 12 to 24 years service, one months salary is given for each year of service; those with 25 years of more are given 36 months salary. The company will also assist with the training courses and exams for who opt for the VSS. Some 760 people have taken the package and left the company. The current number of employees is 1,699. Further reductions in staff are anticipated in April 2000.
12. IFC will monitor ongoing compliance with World Bank Group environmental, health and safety policies and guidelines during the lifetime of the project by evaluating reports submitted annually to IFC by AES Telasi and by conducting periodic supervision.
13. Based on its review of available information regarding potential environmental impacts and proposed mitigation measures, IFC concludes that AES Telasi’s proposed project will meet World Bank Group environmental, health and safety policies and guidelines and host country requirements.
Environmental and Social Mitigation Measures
Broad Community Support
Related SII
