ENVIRONMENTAL AND SOCIAL INFORMATION
Applicable Policy and Categorization. The Project is co-financed with the Islamic Development Bank (IsDB). AIIB’s Environmental and Social Policy (ESP), including the Environmental and Social Exclusion List (ESEL) and the Environmental and Social Standards (ESSs), apply to the Project. ESS 1 (Environmental and Social Assessment and Management) and ESS 2 (Land Acquisition and Involuntary Resettlement) apply to the Project, but ESS 3 (Indigenous Peoples) is not applicable as there are no Indigenous Peoples, as defined under AIIB's ESP, present in the Project area. The Project has been categorized as Category B, reflecting that the anticipated Environmental and Social (ES) risks and impacts are predominantly site-specific and can be effectively avoided, minimized or mitigated through the Project design and the implementation of appropriate mitigation and management measures. The current Project layout has also been optimized to avoid settlements and reduce biodiversity and land-related impacts compared to earlier design iterations.
Environmental and Social Instruments. ES documents have been prepared, including draft Environmental and Social Impact Assessment (ESIA), which incorporates assessments of cumulative impacts, together with a standalone framework Environmental and Social Management Plan[1] (ESMP), a Stakeholder Engagement Plan (SEP), a Livelihood Restoration Plan (LRP), and a Critical Habitat Assessment (CHA). Lenders’ ES Advisor (LESA) hired by the Project carried out Environmental and Social Due Diligence (ESDD) and reviewed the Project ES documents as well as the Sponsors’ ES management capacity and management systems. The ESDD report and draft environmental and social action plan (ESAP) are being prepared. The ESAP will be discussed and agreed with the Sponsors prior to Project approval.
Environmental and Social Aspects. The principal environmental risk relates to biodiversity, particularly potential bird and bat collisions during operation. Baseline surveys identified several species of conservation concern and biodiversity impacts were assessed in the ESIA and are not expected to be significant, following Project design optimization, including the removal of six turbine locations from more sensitive areas, which substantially reduced predicted collision risk. Residual impacts will be managed through a Biodiversity Management Plan, monitoring, and adaptive management measures. Construction-phase impacts, including dust, noise, vibration, soil disturbance, erosion, waste generation, hazardous material and spill risks, and traffic, are expected to be temporary and manageable through the Project’s Health, Safety, Social and Environmental management System (HSSE MS) and associated management plans. In addition, the Project is not expected to result in physical displacement. The Project will require approximately 21.85 hectares of permanent land for wind turbines, access roads, trenches and substation. However, impacts on grazing land are expected to be limited, with permanent impacts generally affecting less than one percent of grazing areas for most affected herders. The principal social impacts relate to economic displacement associated with land requirements, including potential impacts on herders, grazing activities, and livelihoods during construction. A draft LRP has been prepared to identify affected persons, define eligibility and entitlements, and establish livelihood restoration measures. The social assessment has also considered vulnerable groups. Appropriate mitigation measures will be implemented through the HSSE Management Plans, LRP, SEP and ESAP, as applicable.
Occupational Health and Safety (OHS) and Labor and Working Condition. The OHS risks associated with construction activities include transportation and delivery of equipment and materials, use of heavy machinery, excavation works on the site, electrical installation works, handling of chemicals, and works undertaken at height. A framework for construction stage OHS and environmental management plan has been prepared. Site-specific OHS management plans for the construction and operation phases of the Project will be developed and implemented by the EPC Contractors. The Sponsor has provided evidence of a functioning supply chain management system, including several policies and position statements stating that the Sponsor has a zero tolerance for labor violations. Supply chain due diligence is currently being undertaken for the Project. The Finance Documents and ESAP, once prepared, will require the Sponsor and the Borrower to maintain due diligence and management procedures for the sourcing of wind components in accordance with the Bank’s ESP and Good International Practice. Representations and warranties on labor and working conditions will be provided by Project contractors and suppliers and incorporated in key project agreements and contracts.
Stakeholder Engagement, Information Disclosure and Project Grievance Redress Mechanism. Stakeholder mapping and consultations were conducted during the preparation of the ESIA. The draft ESIA and associated documents, including Non-Technical Summary (NTS), SEP, LRP, CHA, CIA, HRRA in English and NTS in Azerbaijani are to be disclosed by the Borrower on its website[2]. The Project will establish and maintain separate Grievance Redress Mechanisms (GRMs) for Project workers and external stakeholders, including project-affected people and local communities. Information on the Project-affected People’s Mechanism (PPM) of the Bank and the Project-level GRMs, including access channels and contact details, will be disclosed through appropriate communication channels in accordance with the SEP. The EPC Contractor(s) will also establish and maintain a workers' GRM consistent with the Project GRM arrangements.
Monitoring and Supervision Arrangements. A Special Purpose Vehicle (SPV) has been established in Azerbaijan and will be responsible for the implementation of the Project. The SPV will hire qualified HSSE staff to monitor the implementation of HSSE management plans. EPC contractor will also deploy HSSE staff to implement the HSSE MS related 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 reports will be prepared based on agreed format and timeline as per the Finance Documents. The Bank’s ES Specialists will join the field-based ES monitoring missions, as necessary.
[1] At this stage, the Sponsor has prepared the Framework ESMP, which establishes the overarching environmental and social management requirements. Project-specific environmental and social mitigation and monitoring measures are presented in the ESIA. Prior to construction, the Framework ESMP will be adapted and supplemented to reflect the final project design, EPC arrangements and site-specific risks, resulting in a project-specific ESMP. This requirement will also be reflected in the ESAP.
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