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RenewGen
Environmental & Social Review Summary

This Environmental and Social Review Summary (ESRS) is prepared by IFC to disclose its findings and recommendations related to environmental and social considerations regarding potential investments. Its purpose is to enhance the transparency of IFC’s activities. For any project documentation or data included or attached herein that has been prepared by the project sponsor, authorization has been given for public release by the project sponsor. IFC considers that this ESRS is of adequate quality for release to the public, but has not necessarily independently verified all of the project information therein. It is distributed in advance of IFC Board of Directors’ consideration and may be periodically updated thereafter. Board dates are estimates only and this document should not be construed as presuming the outcome of the Board Directors’ decision.
Project number 31944
Country
Sri Lanka
RegionSouth Asia
SectorV-BI - Waste to Energy - Renewable Energy Generation
Department
Company nameRenewGen Kotte
Environmental category:B
StatusPending Disbursement
Date ESRS disclosedApril 28, 2012
Previous EventsSigned: June 15, 2012
Approved: July 31, 2012
View Summary of Investment Information (SII), click here

OverviewE & S Project

Categorization

and Applicable

Standards
E&S Risks /

Impacts and

Mitigation
Community/

Engagements
BCSE & S Action

Plans
Client's

Documentation

Overview of IFC's Scope of Review
The scope of review of RenewGen’s compliance with IFC’s Performance Standards included assessment of RenewGen's management capacity of its environmental, social, health and safety performance in relation to IFC Performance Standards, national (Sri Lanka) regulatory requirements and relevant Environmental Health and Safety guidelines. The review relied on documents and reports made available by RenewGen, and interviews conducted by IFC staff. Meetings and interviews with staff focused on business development, operations, human resources, environmental, social, health and safety aspects of the business. Since this is RenewGen's first venture, the need for the Company to develop relevant procedures to augment the Company’s existing management capacity to provide adequate oversight of its environmental, social, health and safety performance in conducting its business were discussed. The IFC team also had meetings with the Waste Management Authority (WMA), visited local government offices, various Municipal Solid Waste (MSW) handling and sorting facilities, and the site for the proposed MSW Waste to Energy (WTE) facility at Kaduwela, Western Province in Sri Lanka.

Discussions with government officials on the environment and social impact assessments focused on scope and processes for establishing community acceptance of WTE projects; baseline health monitoring and communication of potential risks to human health from WTE projects (in addition to compliance with regulatory standards for air quality) as part of the community consultation process was also discussed. MSW incineration and WTE has been used interchangeably in the review, but refer to the same basic process of mass burning of municipal solid waste with an added energy recovery component. Hitachi Zosen Inova (HZI), which is the technology provider for the project has provided confirmation that the proposed WTE project at Kaduwela can achieve emission performance standards established by the European Union (Directive 2000/76/EC and relevant Annexes/Amendments), applicable IFC/WB guidelines for incineration of MSW, and relevant national emission standards established by the Central Environment Authority, Sri Lanka (Nov 2011), as well as ESIA approval requirements for the operation of the project facility at Kaduwela.

The scope of this review includes IFC’s proposed equity investment (IFC Project #31944) and debt (IFC Project #32295) in RenewGen Enviro Ventures India Pvt. Ltd. and the Kaduwela project company Renewgen Environment Protection Kotte Pvt Ltd.
Project Description
RenewGen Enviro Ventures India Pvt. Ltd. is a developer focused on the waste disposal market in and around South Asia. In order to facilitate the development and operation of such projects in the region, the decision has been taken to establish a holding company, as the Sponsor, in Singapore. The Sponsor would hold a portfolio of waste disposal and waste to energy projects in South Asia.

The developer has secured the first competitively awarded Waste to Energy concession in Sri Lanka from the Waste Management Authority of the Western Province in Sri Lanka (WMA). The project is a 25 year concession to build own and operate a 10MW waste to energy project in the Western Province of Sri Lanka. The project will process up to 580MT/day of municipal solid waste (MSW) and will generate up to 10MW of electricity which will be sold to the grid. The concession will be undertaken by Renewgen Environment Protection Kotte Pvt Ltd (“Renewgen Kotte” or “Company”), a company incorporated in Sri Lanka. The Ceylon Electricity Board will off-take the power generated from the plant. The project will use a highly proven (deployed in over 400 plants worldwide) grate based mass incineration technology that is suitable for unsorted MSW in conjunction with advanced emission control systems. The Company will use grate based mass incineration technology (suitable for unsorted MSW) and has tied up with Hitachi Zosen to be the technology partner. The technology is the most widely deployed and commercially proven globally (60% global market share) and Hitachi Zosen is a global leader in the WTE segment with a strong presence in both Europe and Asia having executed more than 450 WTE plants worldwide. The project consultant is Ramboll AG, a leading European engineering firm with experience in over 50 WTE plants, and will be responsible for advisory (concept to commissioning) and project management during execution. The EPC turnkey contractor is Hyquip Technologies Ltd., an Indian EPC company based in Hyderabad, India, which has extensive experience in working on power plants using biomass as feedstock.

The total project cost is estimated at US$ 29 million. IFC is considering providing a financing package of up to US$ 9 million consisting of equity (IFC Project #31944) and debt (IFC Project #32295) at both the Sponsor and Company level.

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