To support the development of sustainable digital infrastructure in Brazil and contribute to cross-border connectivity by financing Phase I of OMNIA’s first hyperscale data center platform in Pecém, Brazil (the “Project”).
OMNIA is a newly launched DC platform by Patria Investments, focused on developing hyperscale, AI-ready, and cloud-optimized DCs. The Project is located in Pecém, Ceará, Brazil, within the Ceará Special Economic Zone that offers tax and regulatory incentives for export-oriented services. The Project will be developed with total gross capacity of 300 megawatt. It will be fully powered by renewable energy through a strategic partnership with Casa dos Ventos, Brazil’s largest renewable energy company. The site is strategically located near Fortaleza, a major subsea cable landing hub in Brazil, enabling low-latency international connectivity to global DCs.
Applicable Policy and Categorization. AIIB’s Environmental and Social Policy (ESP), including the Environmental and Social Standards (ESSs) and the Environmental and Social Exclusion List (ESEL), apply to the Project. Environmental and Social Standard (ESS) 1, ESS 2 (Land Acquisition and Involuntary Resettlement), and ESS 3 (Indigenous Peoples) apply to the Project. The Project is classified as Category B with high risk due to environmental and social (ES) risks and impacts associated with: (i) critical habitat/biodiversity, (ii) potential influx of workers to the Project area of influence during construction phase, (iii) land acquisition and involuntary resettlement along the transmission line, (iv) indirect impacts to a Quilombola (afro-descendent group), a subset of indigenous people (IP) in Brazil, located within 8 km of the Project’s area of influence and (v) contextual and reputational risks associated with legacy issues to IPs living outside of the direct area of influence of the Project.
Environmental and Social Instruments. The Fund Manager has an Environment and Social Management System (ESMS) aligned with AIIB’s ESP and has adopted AIIB’s ESEL for screening potential investments. Patria conducts Environmental and Social Due Diligence (ESDD) to identify gaps between Brazil’s ES requirements and those in AIIB’s ESSs. Patria’s ESDD includes an Environmental and Social Action Plan (ESAP) agreed with AIIB, IFC and other investors. The key ES instruments include Patria’s ESDD report, an ESAP requiring a series of Environmental and Social Management Plans (ESMPs), including a Critical Habitat Assessment (CHA), a Biodiversity Action Plan, a Stakeholder Engagement Plan (SEP) that includes informed consultation and participation with nearby IP groups, a Grievance Redress Mechanism (GRM) for stakeholders and project workers, among others, bringing the Project into compliance with AIIB’s ES Standards.
Environmental and Social Aspects. The potential environmental risks and impacts identified for the construction phase include: (i) land use change, loss of vegetation and terrestrial habitat due to land clearing, (ii) alteration of natural drainage, (iii) impacts due to generation of effluents and waste, and (iv) disturbance from noise, vibration, dust, and traffic. During operation, the Project is expected to generate e-waste, hazardous waste, and wastewater. These environmental risks and impacts will be addressed through the ESMPs. To address water scarcity and local impacts, the Project will conduct an Ecosystem Services Impact Assessment, perform cumulative impact studies with industrial zone developers, and establish a water monitoring system to track usage and losses during commissioning. To assess the biodiversity impact of the construction of the DCs and its associated transmission line, a CHA has been conducted in accordance with the methodology established in IFC PS6. The study and mitigation measures conclude that it is feasible to achieve “no net loss” for impacts on natural habitats. The impact on biodiversity will be addressed through the implementation of a Biodiversity Management Plan. The primary potential social risks and impacts include existing legacy issues associated with IPs who claim the government did not formally recognize their ancestral lands at the time of creating the Port complex (over two decades back); and stakeholder concerns regarding potential impacts to ecosystem services, primarily water and natural resources. The Project also triggers ESS3 because one Quilombola community exists within an 8 km radius of the Project area of influence, but the Project does not trigger any FPIC on criteria as established in ESS 3. In addition, the Project is tagged as Gender Responsive. OMNIA will develop clear gender objectives, monitor progress and achievements, and report these in a Gender Action Plan.
Occupational Health and Safety (OHS), and Labor Working Conditions: The ESDD identified the gaps with respect to OHS policy and procedures and recommends development of the Health and Safety Management Plan (“HSMP”). OHS indicators have been developed to continuously monitor the OHS performance of the Project. Safety training is also provided for the workers at the project site. Additionally, OMNIA’s Human Resources, Human Rights and Contractor Management Plans include specific measures to ensure compliance with IFC PS 2 requirements on Labor and Working Conditions, equally covered in AIIB’s ESS1. OMNIA, through Patria, will develop suitable Codes of Conduct for workers employed under the Project. According to the ESAP, worker accommodation provided during construction and operations will demonstrate alignment with ESS1 requirements. As part of its ESMS, OMNIA will assess risks posed by using private security forces on its premises to people within and outside the Project site. In making such arrangements, the company will apply the principles of proportionality and GIIP and develop procedures to comply with applicable laws relating to hiring, codes of conduct, training, equipping, and monitoring of project security workers. A security management plan will be developed for the Project.
Stakeholder Engagement, Information Disclosure and Project Grievance Redress Mechanisms (GRM). Fund Manager has ensured stakeholder engagement by OMNIA and SEP includes a stakeholder map that identifies all stakeholders including Indigenous People (IP) in the project area of influence, and with whom OMNIA have engaged and conducted meaningful consultation. OMNIA conducted stakeholder meetings in the project area and informed stakeholders about project activities and impacts before soliciting their comments and concerns. The Fund’s Responsible Investment Policy (RIP) has been publicly disclosed on its website (link). ES information about the Project is already available in public domain. To ensure addressal of grievances from project stakeholder, OMNIA has established its GRM that is respectful of cultural and linguistic factors and is easily accessible to both direct and indirect stakeholders. External communications are managed both by OMNIA and a public relations company specializing in disseminating information effectively through various means. The information of established GRM and AIIB’s Project-affected People’s Mechanism (PPM) will be disclosed timely in an appropriate manner.
Monitoring and Reporting Arrangement. As this is a co-investment, monitoring and reporting requirements has been discussed and agreed with the Fund Manager that will apply to the Project. Additionally, the Fund Manager will provide quarterly updates on ESAP implementation. The following monitoring and reporting requirements will be applied: (i) OMNIA’s ESMPs monthly monitoring results to be shared with Patria Fund V during construction works; (ii) ESMP and ESAP monitoring reports to be sent by Patria Fund V to AIIB after each ES Subcommittee meeting of Patria Fund V; and (iii) enhanced monitoring during the first two years of construction to ensure social risks are being managed appropriately to AIIB’s satisfaction.
Asian Infrastructure Investment Bank
Rusu Lee
Senior Investment Officer
Xiali Wu
Investment Associate
Patria
Felipe Rezende
Managing Director
Bruno Fregonezi
Managing Director, Investor Relations
