Uzbekistan: Nukus II 200MW Wind and BESS Project

OBJECTIVE

To increase the renewable energy generation capacity through the construction of a 200MW wind power plant and 100MWhr Battery Energy Storage System in the Republic of Uzbekistan.

DESCRIPTION

The project involves the development, construction, and operation of a wind power plant of 200MW capacity, a 100MWhr Battery Energy Storage System (BESS), expansion of a 220kV switching station and 2x42 km double circuit 220kV Overhead Transmission Line (OHTL) connecting to an existing grid substation. The proposed project site is in the Karatau mountain region in Beruniy and Qorao'zak Districts in Karakalpakstan, Northwestern Uzbekistan.

A 25-year PPPA has been awarded to ACWA through a competitive tender and signed on March 28, 2024, with the National Electric Grid of Uzbekistan (NEGU) as the Public Partner (off taker). A project SPV – Private Partner (ACWA Power Beruniy Wind FE LLC) has been established and will serve as the borrower for the respective plant. 

ENVIRONMENTAL AND SOCIAL INFORMATION

Applicable Policy and Categorization.  AIIB’s Environmental and Social Policy (ESP), including the Environment and Social Standards (ESSs) and the Environmental and Social Exclusion List (ESEL), will apply to this Project. ESS 1 (Environmental and Social Assessment and Management) and ESS 2 (Involuntary Resettlement) are applicable to the ES aspects of the Project. The Project includes development of wind turbines, battery energy storage system (BESS) and 220 kV overhead transmission line (OHTL), Category B is assigned as the Project will have a limited number of potentially adverse environmental and social (ES) impacts during construction and operation phases. Asian Development Bank (ADB) is considering participating in the financing as a senior lender (project finance) and they have categorized as B for environment and B for involuntary resettlement.

Environmental and Social Instruments: The Client has prepared an Environmental and Social Impact Assessment (ESIA) including Environmental and Social Management Plan (ESMP), Non-Technical Summary of the ESIA (NTS), stakeholder engagement plan (SEP) and is currently finalizing the Land Acquisition and Livelihood Restoration Plan (LALRP). Critical Habitat Assessment (CHA) for the Project has been carried out and biodiversity management measures have been prepared. Lenders’ Environmental and Social Advisor (LESA) hired by the Project carried out ES due diligence (ESDD) and reviewed the project ES documents as well as the Client’s ES management capacity. The ESDD report and Environmental and Social Action Plan (ESAP) have been prepared for the Project.

Environmental Aspects: The environmental impacts linked with the construction phase include increased dust levels, gaseous emissions, noise and vibration, generation of solid waste and hazardous waste, wastewater, soil contamination, traffic impacts and occupational health and safety impacts. A construction phase environmental and social management plan (CESMP) will be prepared before the start of construction activities. The environmental impacts during the operational phase of the wind project include bird and bat collision-related fatalities, noise, electrocution of birds within the overhead transmission line footprint, generation of waste, and spills and leaks during maintenance activities. The mitigations measures are included in the ESIA and detailed plans to manage operational phase impacts will also be prepared as part of the operational phase ESMP. In addition, CHA concluded that critical habitat (CH) is triggered for Bukhara Red Deer and Common Crane. The Lower Amu Darya State Biosphere Reserve (LADSBR) is known to hold the largest remaining concentration of these endangered subspecies. The Common Crane was not observed during the spring, 2024 vantage point (VP) surveys conducted along the Project’s OHTL route. However, notable sightings of these species were recorded at the Nukus I wind farm. Therefore, a Biodiversity Action Plan (BAP) will be developed prior to the start of construction activities for biodiversity values for which CH was identified. During the assessment 36 species were identified as Priority Biodiversity Features (PBFs) and the detailed biodiversity management measures are included in the ESIA.

Social and Gender Aspects: The entire land in Uzbekistan as per the country law belongs to the government. The Wind Farm (WF) and the OHTL will require land acquisition of around 103 Ha. According to the census conducted in 2024, the Wind farm and OHTL will impact a total of 39 households, of which 6 will be impacted by the WF and 33 by the OHTL, but the Project will not cause any physical displacement. The Project will result in the impact of two commercial and 7 residential plots. ESIA assessed loss of wages by the agriculture farm workers. The number of workers on the impacted agricultural farms varies depending on the season, such as during harvesting or planting periods. However, the livelihoods of engaged workers are not expected to be impacted, as the impacts on those lands are anticipated to be low. In addition, a total of 25 households have been categorized as vulnerable as per the definition agreed for vulnerable households. As part of the LALRP, a comprehensive Livelihood Restoration Program (LRP) has been developed. Under this program, affected households, severely impacted project-affected-people (PAPs), and vulnerable groups including women, youth, and persons with disabilities will be eligible for livelihood restoration support in addition to the compensation they receive. The ESIA study identified several potential impacts of the Project that may disproportionately affect women and has proposed mitigation measures to address those impacts. These mitigation measures, along with other actions to address gender-related risks, will be detailed in the Gender Action Plan (GAP) and incorporated into other ESMPs.

Occupational Health and Safety (OHS), Labor and Working Conditions: The Project will involve OHS risks typically associated with construction activities. These include collisions with moving machinery and vehicles, hazards related to the use of explosives and hazardous chemicals, risks of electric shock, mechanical and load-handling accidents, exposure to noise, dust, and chemical vapors. To address these risks, mitigation measures have been outlined in the ESMP. Additionally, the SPV, EPC contractor and O&M contractor will be required to prepare and implement a comprehensive Labor and Working Conditions Management Plan (LWCMP). This plan will ensure non-discrimination and equal opportunities in employment, Gender Based Violence and Harassment (GBVH) risk management, provisions for managing migrant labor safety protocols are in place to protect workers and minimize risks during construction and operational phases. The plan will also include training, monitoring, and emergency response measures to promote a safe and healthy working environment.

Stakeholder Engagement, Consultation and Information Disclosure: As part of the scoping phase and the preparation of the ESIA and the LALRP, a SEP was developed. This plan includes a detailed mapping of relevant primary and secondary stakeholders, such as individuals, groups, and institutions impacted by or interested in the Project. Additionally, a final consultation with affected households will be conducted with the specific objective of disclosing and gathering feedback on the LALRP entitlement matrix to ensure it adequately addresses community needs and concerns. The SEP will need to be updated to address stakeholder engagement requirements during the construction and operational phases of the Project. ES instruments prepared in both English and summaries in the local language, including draft ESIA, ESMP, LALRP and NTS were disclosed in-country via ACWA Power and also on AIIB’s website, hard copies of the documents in local language will be made available at the project site for local communities and stakeholders, ensuring ease of access and informed participation in the process.

Project Grievance Redress Mechanism (GRM). A GRM has been established that includes key principles, scope and detailed procedures along with a process flow and timeline for addressing grievances promptly. The GRM also allows for anonymous grievances to be processed and facilitates the PAPs to submit their grievances arising from the land and other asset compensation or any other issues in relation to the Project. During the construction and operational phases of the project, the SPV, EPC contractor, and O&M company will be required to develop and implement a Project-specific Workers’ Grievance Mechanism. The information of established GRMs and Bank’s Project-affected Peoples Mechanism (PPM) will be timely disclosed in an appropriate manner.

Monitoring and Supervision Arrangements. The SPV will hire qualified ES staff to monitor the implementation of ES management plans. EPC contractors will also deploy ES staff to implement the ES management plans at the Project sites. LESA will be engaged to monitor the ESAP implementation during the construction and operation stages of the Project. Monitoring report will be prepared based on agreed format semi-annually during construction and operational phases and will be submitted to AIIB for review by the client and LESA. The Bank’s ES Specialists will join the lender group field-based ES monitoring missions, as necessary.