Divisa Solar

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Project Number: 
PN8783A-01
Expected Consideration Date by the Board: 
12/16/2014
Date Posted: 
10/16/2014
Company: 
Divisa Solar 10MW S.A. (“Divisa Solar”)
Sponsoring Entity: 
Not applicable
Financing Requested: 
Up to US$11.9 million
Sector: 
Energy and Power
Location: 
Coclé Province, Republic of Panama
Country: 
Scope Objective: 

Divisa Solar is a company created to design, build, and operate a photovoltaic solar plant with a nominal capacity of 9.99 MW in the Coclé Province of Panama. The land for the project is guaranteed for 25 years under a long-term agreement.

The power that the project produces would be sold on the spot market through the National Distribution Center (Centro Nacional de Despacho).

The total cost of the project is US$18.4 million and includes the construction of a 34.5 kV, 2.8 km transmission line to deliver the energy to the connection point agreed upon with EDEMET.

The aim of this IIC operation is to provide Divisa Solar with financing to develop, build, and operate the new photovoltaic plant.
 

Environmental Review: 

Environmental and Labor Issues:

This is a category B project according to the IIC’s Environmental and Social Sustainability Policy because it could produce certain effects that may be avoided or mitigated by following generally recognized performance standards, guidelines, or design criteria. The main environmental and social considerations related to the project involve efficient resource use and pollution prevention, labor and working conditions and community health and safety. The project consists of a 9.9 MW photovoltaic solar plant. The environmental impact study for the project Generación Eléctrica Divisa Solar (“the Project”) was approved by the Autoridad Nacional del Ambiente (ANAM) on August 2014.

Topography and Environment and Social Setting: The Project is located near Llano Sánchez – El Roble town, Aguadulce District, Coclé Province. Population density in the project area is low, and the predominant activity is ranching. The landscape of the Project site is characterized by a flat terrain with minor slopes on the sides, presence of some trees, scrubs, and mostly grassland. Located in a rural area with moderate-to-low soil fertility, the land has been used for raising livestock—especially cattle—and, previously as a sugar cane plantation. Since the Project site environment has previously been disturbed because of development of agricultural and grazing activities, no sensitive flora and fauna neither critical natural habitats have been identified on the Project area. Additionally, neither cultural nor archeological sites have been identified on the Project site; however, Divisa Solar will implement chance finds procedures in case of any unexpected archeological find.

Air Emissions: Overall, the project will have a positive impact on air emissions, as it will generate electricity from a renewable source, offsetting greenhouse gas emissions by more than 4,850 tons of CO2 equivalent annually. Most air emissions will occur during the construction phase, originating from vehicles and machinery operated by the contractors. In addition to gas emissions from internal combustion engines, vehicular traffic and earthmoving work will generate fugitive dust emissions. In order to mitigate gas emissions, specific measures to mitigate and control these emissions will be included in Project´s Environmental and Social Management Plan (ESMP).

Solid and Liquid Waste: Waste generated by the solar plant will be managed pursuant to the ESMP. Most solid and liquid waste associated with the project will be generated during the construction phase. Workers will have access to essential services (e.g., dressing rooms, restroom facilities, and break room), offices, and materials. Domestic wastewater will be removed by an outside firm. Insofar as possible, machine and vehicle maintenance will be performed at workshops or garages off site. If repairs must be performed on site, the ESMP will indicates the pertinent measures for handling oil, lubricants, rags, used spare parts, and other contaminated items.

Any non-hazardous industrial waste generated during the installation process (e.g., plastic, wood, iron, cardboard, wire, and metal) will be temporarily stored before it is sent to recycling centers or final disposal sites licensed by the local government. Waste contaminated with hydrocarbons (e.g., containers, filters, rags, and soil) will be managed following the specific plan that will part of the ESMP. The ESMP will include a contingency plan to be followed in the event of spills of oil or other pollutants. Containment, remediation, and ex-post evaluation measures are included.

Occupational Health and Safety: The ESMP will include the specific Health and Safety Occupational Plan (HSOP) for both the construction and operation phases in order to prevent and mitigate any adverse impact and risk on the health and safety of the workers and affected community. The ESMP will include specific measures to manage the increase of heavy trucks traffic in the affected communities during the construction phase as well as contingency measures for fires, spills, and accidents both on and off site.

Labor and Social Issues: Divisa Solar will comply with the Panamanian labor laws, International Labor Organization (ILO) standards and international good practices established in the IFC´s Performance Standard 2 – Labor and Working Conditions. With a view to implementing the project, Divisa Solar encouraged community participation through a public consultation/socialization process that included meetings with local stakeholders, the affected community and local authorities and a series of surveys of the area’s inhabitants. This process provided information on the population’s main concerns as to the potential social, economic, environmental, and cultural impacts of the project.  No specific concerns about environmental aspects of the Project were raised by the community during the consultation process, on the contrary the community sees the Project as an opportunity to mitigate environmental problems in the area such as air and land pollution.

Monitoring and Reporting: At the IIC´s request, Divisa Solar will implement an Environmental and Social Management System (ESMS) for the life of the loan following the requirements in the IFC´s Performance Standard 1 – Assessment and Management of Environmental and Social Risks and Impacts, which include the following elements: policy, identification of risks and impacts, organizational capacity and competency, emergency preparedness and response, stakeholder engagement, and monitoring review.  The implementation of this ESMS will ensure compliance with the IIC’s environmental and occupational health and safety requirements.

Divisa Solar has already developed an Environmental and Social Management Plan (ESMP) for the construction and operation phases of the project; however, some plans of this ESMP need to be improved and complemented such as the grievance mechanism, reforestation plan, contingencies and risk disaster plan, erosion control and solid waste management plan for the construction phase, archeological protocol, and heavy trucks traffic plan. In addition, Divisa Solar will have to develop specific plans such as the procedure for cleaning the panels that will include the procedures and methods for cleaning the panels as well as all the mitigation and control measures to reduce use of water resources, and the procedures for removing weeds in the solar plant.   

The company will comply with the implementation of the Environmental and Social Action Plan (ESAP) agreed with the IIC. Divisa Solar will submit annual progress reports to the IIC on the implementation of the ESAP.