India: ENGIE Solar Power Project

OBJECTIVE

To promote electricity generation from solar energy resources through private capital mobilization in Gujarat.

DESCRIPTION

The Project involves the development, construction and maintenance of a 400MWAC solar power project in Gujarat, India. (Project)

Offtake of the Project is underpinned by a 25-year Power Purchase Agreement (PPA) for 100% of the capacity that is signed with Gujarat Urja Vikas Nigam Limited (GUVNL) at a tariff of INR2.49 per kWh.

ENVIRONMENTAL AND SOCIAL INFORMATION

Applicable Policy and Standards. The loan will be co-financed with ADB as lead co-financier, and the project’s environmental and social (ES) risks and impacts are being assessed in accordance with ADB’s Safeguard Policy Statement (SPS, 2009). To provide for a harmonized approach to addressing the ES risks and impacts of the project, and as permitted under AIIB’s Environmental and Social Policy (ESP), ADB’s SPS will apply to the project in lieu of AIIB’s ESP. AIIB has reviewed ADB’s SPS and is satisfied that: (a) it is consistent with AIIB’s Articles of Agreement and materially consistent with the provisions of AIIB’s ESP, including the Environmental and Social Exclusion List (ESEL) and the relevant Environmental and Social Standards (ESSs); and (b) the monitoring procedures that are in place are appropriate for the project.

ES Categorization and Rationale. ADB has categorized the ES risks of the project as Category B for Environment, B for involuntary resettlement and C for Indigenous Peoples (which are equivalent to Category B if AIIB’s ESP were applicable). The potential adverse ES impacts associated with the activities considered for financing are limited, not unprecedented or irreversible, localized to the Project’s site, and can be successfully managed using good practice in an operational setting.

ES Instruments. An Environmental and Social Impact Assessment (ESIA) has been prepared including an Environmental and Social Management Plan (ESMP). An Environmental and Social Compliance Audit (ESCA) was commissioned by the ADB, and a Corrective Action Plan (CAP) was prepared with corrective measures, intended to close the gaps within a reasonable period of time. Through implementation of corrective measures, the project is expected to be designed and operated in accordance with ADB SPS objectives.

Environmental and Social Management System. The key ES issue for this project relates to the management and monitoring systems to assess and manage ES risks and impacts during construction, operation, and decommissioning in compliance with the applicable local regulatory requirements, ADB SPS, and good international industry practices (GIIP); assurance of fair, safe and healthy working conditions for employees and contracted workers in line with the legal and ADB SPS requirements and consistent management of occupational health and safety (OHS) policies and practices; monitoring and management of air emissions, waste and wastewater and hazardous materials; emergency preparedness and response including that for community engagement activities related to ES commensurate to the risks and impacts associated with the project. As part of the CAP, a full-scale ESMS shall be developed in alignment with ADB SPS requirements and to be implemented at site and corporate level.

Environmental Risks and Impacts. The Project is expected to have impacts and risks associated with pre-construction and construction activities which include, but not limited to, generation of dust, increase in noise levels, soil erosion, impacts to water resources, potential accidental injury and/or mortality of at-risk species, loss/degradation of modified habitat (arable land) and moderately degraded natural habitat (savanna), hazardous materials, waste generation, labor and working conditions, health and safety, and increased traffic. And during operations, impacts and risks will primarily be related to water use, solid and hazardous waste, labor and working conditions, and health and safety. The ESMP was developed to mitigate these risks and impacts and a CAP in place to facilitate the project's adherence to ADB's safeguard requirements.

Land Acquisition and Involuntary Resettlement. The Project footprint is about 1650 acres along with the transmission line roughly 60 m in length as an Associated Facility. An environmental and social compliance audit (ESCA) as per ADB SPS was commissioned in November 2023 to review the compliance of ongoing preconstruction activities and land procurement process along with related involuntary resettlement. Per the ESCA, Enren is still in the process of acquiring the land for the project. Approximately 992 acres are private agricultural land being acquired through a long-term lease agreement on a willing lessor and willing lessee basis. A project Resettlement and Livelihood Restoration Plan (RLRP) will be prepared to address involuntary resettlement impacts on the affected people on such government land parcels and will be actioned if these parcels are finally allotted to the project. The RLRP will also address any impacts on landowners (landlessness, impoverishment) who willingly leased their land to the project through negotiated settlement.

Gender Aspect and Labor and Working Conditions. Women’s safety at workplace is covered by the “Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013” and under the Women & Child Development Department at Government of Gujarat. Women’s employment in Borrower’s business activities is encouraged, including the Project’s operating and maintenance activities. In addition, the ESMP includes requirements to identify and mitigate potential health, safety, social and environmental hazards in all Project activities that pose a risk to employees and may also have the potential for disruption of site works. All suppliers and contractors will be advised of the importance of implementing appropriate management measures to identify and address issues related to the environmental and social provisions of the ESMP, including labor and working conditions and health and safety matters. Compliance with the ESMP is an essential part of the contract document with suppliers and contractors. This compliance as well as representations and warranties to be provided to the Borrower by suppliers and contractors will be reflected in relevant agreements and contracts.

Stakeholder Engagement, Consultation, and Information Disclosure. As part of the project's CAP, a project-level stakeholder engagement plan (SEP) and grievance redress mechanism (GRM) will be developed. The Borrower and the engineering, procurement, and construction (EPC) contractor will implement these project-specific SEP and GRM on site. Stakeholder engagement and consultations with project-affected people will also be done in relation to the implementation of the RLRP. The E&S documentation, including ESIA and ESMP, will be disclosed timely in English language and the Executive Summary or equivalent in local language(s) by Sponsor both online and made available in hard copy in the Project area. The links to these documents will also be posted on the Bank’s website.

Project-level Grievance Redress Mechanism (GRM) and ES Monitoring. The Borrower has a draft GRM procedure included in its RLRP. The Lenders have specified the development of the project-level SEP and GRM as part of an ES action plan for the Borrower to align with ADB SPS. The information of established GRMs and the Bank's Project-affected People’s Mechanism (PPM) will be timely disclosed in English and local language(s) in an appropriate manner. The RLRP SEP and GRM will be further developed during finalization once government land has been allotted to the project. AIIB and ADB will jointly monitor the implementation of ESMP and CAP through implementation support missions. More detail ES monitoring and reporting arrangement will be further discussed and determined with the Sponsor.