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Environmental & Social Review Summary
This Environmental and Social Review Summary is prepared and distributed in advance of the IFC Board of Directors’ consideration of the proposed transaction. Its purpose is to enhance the transparency of IFC’s activities, and this document should not be construed as presuming the outcome of the Board of Director’s decision. Board dates are estimates only.
Any documentation which is attached to this Environmental and Social Review Summary has been prepared by the project sponsor and authorization has been given for public release. IFC has reviewed this documentation and considers that it is of adequate quality to be released to the public but does not endorse the content.
Heavy Fuel Oil - Thermal Power Generation
DIBAMBA POWER DEVELOPMENT COMPANY
Date ESRS disclosed
November 23, 2009
Invested: July 19, 2011
Signed: June 30, 2010
Approved: June 29, 2010
View Summary of Proposed Investment (SPI),
Category & Applicable Standards
Key Issues& Mitigation
Overview of IFC's scope of review
Kribi Power Development Company (KPDC or the company), an affiliate of AES Sonel, the privatized integrated national electric utility of Cameroon, is developing a 86 MW Heavy Fuel Oil (“HFO”)-fired thermal power plant and 2 km 90 kV transmission line, collectively called the “Project.”
IFC has previously invested in AES Sonel to support their 2005-2009 investment plan. As a result, AES Sonel has strengthened its environmental and social management system to operate the company in accordance with IFC’s Performance Standard on Social and Environmental Sustainability (PS or Performance Standards). KPDC is receiving support from AES Sonel to develop the Project to the same standard.
IFC’s review of the Project consisted of appraising technical, environmental and social information submitted by KPDC and AES Sonel, including the Environmental and Social Impact Assessment (ESIA) report, the Resettlement Action Plan (RAP), and the archaeological assessment report prepared for the Project.
IFC’s appraisal team had interviews with:
- the KPDC project team in charge of environmental and social assessment and management;
- the environmental assessment team of the consulting firm (Scott Wilson) retained by KPDC; and
- the officers from Health Safety and Environment (HSE) Department of AES Sonel.
The appraisal also included:
- the Dibamba site;
- interactions with project-affected people along the 2 km transmission line corridor.
This Dibamba project was previously disclosed on April 25, 2008 as part of the Kribi project. Both projects are now being disclosed separately to reflect the separate investments.
KPDC is developing 86 MW Heavy Fuel Oil (“HFO”)-fired diesel engine power plant (Dibamba), located at Yassa village about 15 km from Douala, and a new 2 km 90 kV transmission line from the Dibamba plant to the existing Ngodi Bakoko substation. The Dibamba plant may be converted to gas-fired if natural gas becomes available. Sonel will also be the off-taker of the power produced by KPDC. The Project will be Cameroon’s first Independent Power Project (IPP). Dibamba will be an emergency thermal power plant to avoid major load-shedding. Construction works of the Dibamba plant is completed and testing has been performed. Site clearing activities and revegetation are being undertaken.
The Dibamba Project objectives are to provide peaking and reserve capacity in electricity generation, in order to meet the growing public sector electricity demand and industrial expansion. The project will help avoid load shedding during the dry season (which typically lasts from January to June each year).
Identified applicable performance standards
While all Performance Standards are applicable to this investment, IFC’s environmental and social due diligence indicates that the investment will have impacts which must be managed in a manner consistent with the following Performance Standards:
- PS1 Social and Environmental Assessment and Management Systems;
- PS2 Labor and Working Conditions;
- PS3 Pollution Prevention and Abatement;
- PS4 Community Health, Safety and Security;
- PS5 Land Acquisition and Involuntary Resettlement; and
- PS8 Cultural Heritage.
The Project site is in a peri-urban area characterized by long-term human disturbance hence PS6 does not apply. While there are Bakola people, living in the general region of the Project, none are affected by it thus, PS 7 does not apply.
Environmental and social categorization and rationale
The Project was categorized as B because of its limited and site specific impacts. The Project did cause the economic displacement of 47 households, but avoided physical displacement through design changes. Archeological material was recovered from the site that spanned cultures from the Iron Age to the colonial period, but they were removed by competent archaeologists with the assistance of the Company. The other issues concern energy efficiency and greenhouse gas emissions; pollution prevention and abatement typical to the type thermal power plants (e.g., air emissions, water supply and effluent, noise, hazardous and non-hazardous waste, occupational safety).
Key environmental and social issues and mitigation
Key environmental and social issues and mitigation
The company has presented their assessment of the project’s environmental and social impacts and risks and their plans to mitigate those impacts and risks. IFC has reviewed their assessment and plans and concludes that, upon implementation of their proposed plans, the company is developing the Project in accordance with the IFC’s Performance Standards on Social and Environmental Sustainability (PS or Performance Standard). Findings of the IFC’s review and conclusions are summarized for each applicable PS in the paragraphs below.
- PS1 Social and Environmental Assessment and Management Systems:
KPDC, as an affiliate of AES Sonel, has demonstrated its commitment to carry out the Project in accordance with AES Sonel’s Environmental and Social Policy (January 17, 2005), Cameroonian environmental regulations, and IFC’s Performance Standards. The Company carried out Environmental and Social Impact Assessment (ESIA) for the project by retaining independent experts including a UK-based consulting firm (Scott Wilson) and a Cameroon-based archaeological expert (Institut de recherche pour le développement). In addition, Resettlement Action Plan (RAPs) was prepared and an archaeological survey was conducted.
Seven alternative sites were reviewed for the Dibamba component, and the Dibamba site was selected as the best option to minimize environmental and social impacts, including consideration of the proximity to the HFO supply infrastructure and the existing electricity grid. The transmission line corridor was designed, to the extent possible, to avoid physical displace of households.
The ESIA for Dibamba was completed in January 2008, and the Ministry of Environment approved it on February 28, 2008.
The ESIAs include framework Environmental Management Plans (EMP) and Social Management Plans (SMP). KPDC will develop full EMPs and SMPs that encompass all aspects of mitigation, management, monitoring and institutional measures that KPDC will undertake. These full EMPs and SMPs will be based on final project design specifications and will be developed by KPDC prior to starting construction and operation respectively, in coordination with the Engineering, Procurement and Construction (EPC) contractors and Operation and Maintenance (O&M) contractors.
Organization and Training: KPDC was established as an affiliate of AES Sonel to develop the project. KPDC will have an environmental and social team within KPDC to implement the management program in close coordination with the EPC contractors, O&M contractors, and the corporate HSE Department of AES Sonel. Dibamba will be one of the largest HFO-fired diesel engine power plants, together with the AES Sonel’s existing 85 MW Limbe Thermal Power Plant. KPDC will design the necessary environmental, health and safety training programs in close coordination with AES Sonel.
Monitoring: The management program for the project includes the EMP, SMP, and RAP. AES Sonel has a corporate environmental auditing system, and KPDC’s performance in implementing these programs will be monitored by such systems. Qualified and experienced external experts are retained to carry out / verify relevant monitoring information (e.g., air quality and emissions, thermal efficiency performance, evaluation of the archaeological properties if found during construction period.). As mentioned above, once the EPC contractors and O&M contractors are identified, the EMP will be updated as appropriate.
Reporting: As part of the already established environmental management system of AES Sonel, the effectiveness of KPDC’s management program will be reviewed periodically by the management of AES Sonel and KPDC. All the actions included in the management program (EMP, SMP, and RAP) are disclosed to the affected communities.
- PS2 Labor and Working Conditions:
Human Resources: The Project will be owned and operated by KPDC, which will be in turn be majority owned by AES Sonel. KPDC will put into place a Human Resources Policy and management structure to meet the requirements of PS2. This policy and management structure will be based on those of AES Sonel. IFC has reviewed and found the AES Sonel policy, the “Convention Collective d’Enterprise AES Sonel,” and programs to be acceptable and consistent with PS2 requirements. AES Sonel’s human resource policy includes non-discrimination and equal opportunity provisions. Workers at AES Sonel are represented by a union, and collective bargaining is evident. The same approach toward freedom of organization and collective bargaining will be applied to KPDC.
During the construction phase, up to 480 jobs (mostly short term low-skill jobs) were created at the plant site and along the power transmission line.
Occupational Health and Safety:
KPDC will put in place the same international good practice health and safety policies and programs, and employee training programs, as are currently used by AES Sonel. These policies and programs are monitored, evaluated and managed by AES Sonel. AES Sonel’s experience rate with lost time accidents (in which at least one day of work was lost) per 100,000 hours worked is .23. This figure is below the average, .93, for all industries in, for example, the United Kingdom according to the Safety Health Environment Intra Industry Benchmarking Association. While AES Sonel is seeking constant improvement in health and safety standards, the current accident rate is comparable to industrialized world rates. As of November 11, 2009 the Dibamba plant had one million man hours without lost time accident.
- PS3 Pollution Control and Abatement:
Pollution Prevention, Resource Conservation and Energy Efficiency: The environmental health and safety impacts during construction phase included (1) dust rise from site activities (2) vehicle exhaust emissions (3) soil erosion (4) fuel/foul water discharge (5) noise and vibration (6) accidental risks the EPC contractor has put in place operational procedures with mitigation measures such as storage of materials on-site for reuse to reduce vehicular movement, regular inspections to ensure roads are swept or sprayed to minimize dust generation, minimization of bare areas and vegetation clearance, installation of pit latrines and placement of temporary bunds around oil storage tanks , control traffic speed and provide driver training in order to address and minimize these impacts.
The Dibamba power plant will use HFO-fired reciprocating engines which can achieve higher energy efficiency than conventional steam power plants, and have the advantage of using much less water.
Air quality impacts: The Dibamba project was appraised against the World Bank Group Environment, Health and Safety (“EHS”) Guidelines (1998) and it is planned to comply with these guidelines by specifying the air emission limits of the plant as 2,000 mg/Nm3 at 15%O2 for NOx, 0.2 tpd/MWe of SO2 emissions by limiting the sulfur content of the HFO as 1.0% (achieving actually 0.1 tpd/MWe), and 50 mg/Nm3 at 15% O2 for PM. The stack height of the proposed Dibamba plant is 40 m, to ensure that the ambient air quality levels will comply with the WHO air quality guidelines. The Dibamba ESIA shows, however, that the WHO hourly standard value for NO2 and 10-minute standard for SO2 would only be achievable at a limited number of receptors under specific meteorological conditions. KPDC is committed to implementing a comprehensive air quality monitoring program and operational adjustment to ensure that WHO air quality guidelines are not exceeded.
Noise: KPDC will incorporate appropriate noise mitigation measures into the final project design to ensure that the noise levels comply with the WHO ambient noise criteria as well as the World Bank Group noise guidelines at relevant noise receptors.
Water use and effluent: Potentially contaminated wastewater will be collected and treated prior to being discharged to a soak-away system or to the streams surrounding the plant site at Dibamba in compliance with the World Bank Group effluent guidelines.
Hazardous Materials Safety: KPDC will ensure that the onsite storage facilities and practice of those liquid fuels are safe and regularly monitored to minimize safety risks to the surrounding communities.
Greenhouse Gas (GHG) emissions: The Project is predicted to emit 210,000 ton CO2/year based on the estimated annual usage and energy efficiency performance, which is 43% (LHV basis). The carbon emission factor of 77,400 kgCO2/TJ (LHV) for Heavy Fuel Oil is used in this estimation. The CO2 emissions performance is estimated to be 650 gCO2/kWh for Dibamba. KPDC will monitor thermal generating efficiency and annually quantify and evaluate GHG emissions performance for the Project. Cameroon’s thermal power generation is currently oil based with average of about 680 gCO2/kWh for oil-fired generation (2003-2005 average according to International Energy Agency statistics). Dibamba will be oil based due to its emergency nature; KPDC is considering its conversion to gas in 2013, which would reduce its carbon emissions.
Emergency Preparedness and Response: KPDC will develop, in coordination with the EPC and O&M contractors, the site emergency preparedness and response plans, including typical measures for the type of combustion technology options considered and to effectively respond to emergency situations to minimize risks and impacts to the environment and the surrounding communities.
- PS4 Community Health, Safety and Security:
For delivery of HFO to the Dibamba site, KPDC will require fuel suppliers to ensure that delivery of those hazardous materials by trucks are conducted safely in accordance with good international industry practice.
KPDC will retain security contractors to provide security to safeguard its personnel and property at the Project site. Necessary training and monitoring and screening of those security contractors will be conducted in accordance with good international industry practices as already established at AES Sonel.
- PS5 Land Acquisition and Involuntary Resettlement:Economic and Physical Displacement:
For the Dibamba component, the land acquisition involved the economic displacement of 47 project-affected households (PAH). The associated 90 kV transmission line was rerouted to avoid physical displacement. Thus, there is no physical displacement associated with this component. Crop compensation was paid to the PAHs in January 2008, using the market value. The final compensation amount paid was 94% above the government rates. This high compensation amount was set in order to help the PAH restore their livelihood, but additional measures will also be provided to ensure that livelihood is, in fact, restored.
Consultations and Grievance Mechanism: Consultations were carried out through a series of focus groups. A summary of the RAP has been available to local communities. Grievances involving project-affected people and the Company will be addressed through a designated Company grievance officer, who will ensure that the grievance will be addressed within a 14-day period. If not, the ESIA and RAP Coordination Unit (“ECRU”) will take responsibility for the grievance and ensure that is resolved within 14 days. People will still be able to take grievances to court if they are unsatisfied with the Company’s grievance process. The RAP established a monitoring and evaluation framework for ensuring that the RAP activities are carried out.
Evaluation and Monitoring: Additional evaluation and monitoring will be carried out to ensure that the overall objectives of PS5 are met with respect to livelihood restoration.
- PS8 Cultural Heritage: Archaeological surveys of the Dibamba power plant site has identified archaeological evidence of human artifacts from the Stone Age through the Iron Age and into the pre-colonial period. As a result, the Company had an archaeologist present at the Dibamba site during the stripping of the cover, who identified and helped to remove finds according to the Company’s chance finds procedure and using accepted international techniques. As the artifacts appear to be old and, therefore, not something used by contemporary communities, consultation about the site will focus on national authorities. This consultation will take place as part of developing the chance finds procedure for future KPDC projects.
Client's community engagement
Regarding the Dibamba project, a series of discussion meetings with villagers and a public consultation meeting were held in November 2008 attended by the Divisional Chief of Douala and 150 people from communities of the affected village, Yassa. Various areas of concern were discussed including potable water supply to communities, employment opportunities for local villagers, compensation for the affected land, community relations, community development, health and environmental impact, cultural property. KPDC is implementing continued consultation and programs to address these concerns. In addition, the ESIA validation procedure carried out by the Ministry of Environment included a 2 week public consultation in early February 2008. The ESIA report was put at the disposal of the visitors in a lecture room opened at Yassa, and their comments were recorded in the books made available.
Local access of project documentation
The complete set of documentation is also available locally at the following locations:
KPDC / AES Sonel (Douala)
Address: 63 Avenue de Gaulle
(Yaoundé)Address: Ministry of Environment and Protection of Nature
Any enquiries and/or comments about the project may be directed to
Mr. Jeremie Bitanga
Title: Dibamba Project Sub Director
Dibamba Power Development Company / AES SonelAddress: 63 Avenue de Gaulle
Tel: +237 34 43 47 14
Fax: +237 34 42 22 47
Availability of Full Documentation
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