India: Fourth Partner Energy Distributed Solar Generation

OBJECTIVE

To support the development of distributed solar generation in India under rooftop solar and open access models.

DESCRIPTION

The Project involves long tenor financing to Fourth Partner Energy Private Limited (FPE), a leading independent power producer (IPP), for the development and operation of a portfolio of distributed solar projects. The portfolio comprises rooftop and ground-mounted solar projects with an aggregate capacity of 602MWp for commercial & industrial (C&I) clients. The proposed financing would streamline financing structure by providing debt through a single facility to a diversified pool of assets, thereby providing the benefits of scale, ease of administration, and pooling of cash flows.

ENVIRONMENTAL AND SOCIAL INFORMATION

Environmental and Social Policy, Standards, and Categorization. The Project will be co-financed with IFC as lead co-financier, and Project’s environmental and social (ES) risks and impacts have been assessed in accordance with the IFC's Policy on Environment and Social Sustainability (ESSP) and the Performance Standards (PSs). To ensure a harmonized approach to addressing ES risks and impacts of the Project, and as permitted under AIIB’s Environmental and Social Policy (ESP), IFC’s ESSP and PSs will apply to the Project in lieu of AIIB’s ESP. AIIB has reviewed the IFC’s ESSP and PSs and is satisfied that: (a) they are consistent with the provisions of AIIB’s ESP, including AIIB’s 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. IFC has categorized the investment as a Category B project according to IFC’s ESSP. This is equivalent to Category B if AIIB’s ESP were applicable.

Environment: Based on information reviewed by IFC, the proposed Project will have limited adverse ES impacts that are few, site specific, largely reversible, and readily addressed through existing mitigation measures and good international industry practices (GIIP). Most of these ES impacts occur only during the brief construction period and include air quality and noise impacts, community safety impacts from the temporary influx of project vehicles and non-resident workers, occupational health and safety (OHS) risks for workers, contractor management, resource efficiency, and waste management. During operations, the main ES risks and impacts are related to stakeholder engagement and biodiversity management.

Biodiversity: Rooftop solar projects will have a negligible impact on biodiversity due to their installation on existing commercial and industrial buildings. Ground mounted open access sites present a relatively higher biodiversity risk profile. Critical habitat screening of all project-financed Open Access (OA) sites suggests that critical habitat values may exist for three of the sites related to the critically endangered Great Indian Bustard and Lesser Florican. The three sites include Atharga (Karnataka), Gondal (Gujarat) and Pavagada (Karnataka).  Critical habitat screening suggests that there is a limited probability that four OA sites could partially meet IFC’s PS6 Biodiversity critical habitat applicability criteria. Therefore, FPE will adopt a precautionary approach and develop site specific Biodiversity Action Plans to ensure net gain for critical habitat species through collision and electrocution mitigations and community-based habitat conservation.

Social: All land for OA panel installation is identified and has been or is being acquired on Willing Buyer / Willing Seller basis with no option of recourse to judicial expropriation. Site visits and interviews with landowners and community members by IFC in the project areas confirmed that no third-party tenants or sharecroppers are adversely affected by these transactions.

Stakeholder Engagement and Grievance Mechanism: FPE’s ESMS includes a Stakeholder Engagement Framework (SEF) to guide their stakeholder engagement activities in the form of Stakeholder Engagement Plans (SEP) applicable throughout the project cycle, from planning and preconstruction through decommissioning. The SEF advises FPE on how to conduct stakeholder mapping and analysis and recommends appropriate engagement methods and monitoring and reporting processes, among others. For each OA site, SEPs will include a grievance mechanism and measures to encourage participation of project-affected people especially vulnerable or disadvantaged people.

E&S Information Disclosure: FPE’s FY21-22 Sustainability Report is available here. IFC reviewed Environment and Social Impact Assessments (ESIA) for two operational OA sites. These ESIAs are disclosed in the Client Documentation section of IFC’s Project Disclosure portal. Two remaining ESIAs for early-stage OA subprojects will be completed and disclosed.