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The investment project involves the construction and operation of the 184 megawatt Shuakhevi hydropower project, consisting of the 178 MW Shuakhevi plant and the six megawatt Skhalta plant, as part of the Adjaristsqali cascade of four run-of-the-river hydropower plants with a total planned installed capacity of 400 megawatts. According to the project environmental impact assessment (EIA), "[t]he Government of Georgia (the Government) has prioritised the development of renewable and alternative sources of energy. Long term goals include the replacement of thermal generation, realisation of Georgia's hydropower resource potential and the attraction of foreign investment in energy projects. Hydropower development on the Adjaristsqali River is considered by the Government to play an important role in achieving these objectives. According to the MIGA documentation: "The country has a large pipeline of hydro projects for which the Georgian government is actively seeking foreign participation."
According to the IFC, the proposed investment, the Shuakhevi hydropower is a "184 MW hydropower scheme comprised of two dams (39 m and 22 m in height, respectively) with reservoirs on the Adjaristsqali and Skhalta Rivers; a 5 m weir on the Chirukhistskali River; a 6.4 km tunnel from the Chirukhistskali River through to a 6 MW Hydro Power Plant (HPP) on the Skhalta river; a 9.4 km tunnel from the Skhalta and Chirukhistskali rivers to the Didachara reservoir on the Adjaristsqali River; and a 18 km tunnel from the Didachara reservoir to the 178 MW Shuakhevi HPP."
The project will export power to Turkey through the 400 kV Akhalskhe-Borcka cross-border transmission line for nine months of the year, and sell domestically for three consecutive winter months for the first 10 years of operations. In order to connect to the state grid, a 220kV transmission line from the power station to the national grid is being built with financing from the World Bank.
Specific project components are as follows:
Shuakhevi Scheme (181 MW)
Koromkheti Scheme (150 MW)
To support the main works the following activities will also be required for construction and / or maintenance
The IFC indicates that "[t]he Shuakhevi scheme is located in the Adjaristsqali region of the Autonomous Republic of Adjara in southwest Georgia and will involve construction of 5.9 km of new roads and four new bridges. Construction camps for this scheme will be developed adjacent to the Chirukhistskali weir (up to 50 persons), the Skhalta and Didachara dam walls (100-150 persons), the Shuakhevi HPP (up to 400 persons) and one of the tunnel adit portals (up to 50 persons). Each construction camp will include office, accommodation facilities, workshops, storage and sanitation facilities.
Additionally, "[t]he Shuakhevi scheme, construction of which is expected to take three years, will generate 464 GWh power annually, to be exported to Turkey through a cross border transmission line for 9 months of the year, and sold domestically during the 3 winter months when Georgia is energy deficient. The ground breaking ceremony was held at the project's construction site on September 16, 2013."
The IFC notes that "[t]his phase 1 investment does not include the development of transmission lines to export power generated to the national grid. Electricity from the powerhouses will be conveyed to the national grid via a new 120 km 220kV transmission line between existing substations in Batumi and Akhaltsikhe." Rather, [t]his line is part of an overall transmission line expansion for Georgia and will be the subject of a separate ESIA to be developed by the Government of Georgia on behalf of the Georgian State Electro System LLC (GSE) in accordance with Georgian and World Bank Group requirements. Based on an agreement with GSE, AGL is conducting a[separate] ESIA for the transmission line development." IFC states that "[i]t is expected that it will be constructed and in operation by late 2015 / early 2016."
RISK CATEGORIZATION
The project is a category A under MIGA's Policy on Environmental and Social Sustainability. A proposed investment is classified as Category A if it may have potentially significant adverse social or environmental impacts that are diverse, irreversible, or unprecedented. The Assessment is based on the IFC's assessment in accordance with its Policy on Environmental Social Sustainability. IFC documentation states that "[t]his is a Category A project due to diverse and potentially significant adverse risks posed across multiple sites to, among others, hydrology/ecological flow, land use and ownership, biodiversity, dam safety and community/worker safety. All of the IFC's Performance Standards (PSs) are triggered by the project with the exception of PS 7: Indigenous Peoples (IPs), as no IPs have been identified in the project area."
APPLICABLE SOCIAL AND ENVIRONMENTAL STANDARDS
PS 1 - Assessment and Management of Environmental and Social Risks and Impacts
PS 2 - Labor and working conditions
PS 3 - Resource Efficiency and Pollution Prevention
PS 4 - Community Health, Safety and Security
PS 5 - Land Acquisition and Involuntary Resettlement
PS 6 - Biodiversity Conservation and Sustainable Management of Living Natural Resources
PS 8 - Cultural Heritage
ENVIRONMENTAL AND HUMAN RIGHTS RISK ASSESSMENT
Project documentation states that [t]he Project is located within the mostly rural municipalities of Khulo, Shuakhevi and Keda. Residential areas that may be affected by the Project mostly comprise small villages and the total population in the vicinity of the Project is approximately 15,000. The Ethnic Georgians (largely of Christian Orthodox and Muslim denomination) represent the majority of the local population.
The following assessment is based on information derived from the environmental and social impact assessment. According to the project EIA, those people that may be affected by the Project include:
The EIA also states that "[t]he potential for the Project to have combined environmental and social effects with other existing and planned projects was considered. The assessment undertaken to work out these types of combined effects is known as a Cumulative Impact Assessment (CIA). CIA was integrated within the environmental and social assessments carried out for the Project and took into account the potential effects arising from the following known existing and planned developments:
IFC documentation states that "[t]he main cumulative impacts identified in the ESIA include those on aquatic ecology (including impacts on the fish populations and spawning habitats) during operations, and traffic during the construction phase of the Shuakhevi scheme". Therefore, where it is possible for cumulative impacts to be identified, it has been noted in the relevant subsection of the analysis.
LABOR RIGHTS
According to project documentation, "the project will require a peak construction labor force of around 800 workers. Construction works will be underway 24 hours a day, seven days a week and are likely to consist of three shifts of eight hours or two shifts of ten hours. During operations, the workforce is likely to comprise 60 full-time employees."
However, IFC indicates that "[s]ocial studies undertaken for the ESIA identified the potential for several adverse effects on local communities. When major infrastructure projects are developed they can encourage outsiders to migrate into an area in the search for work such as, for example taxi driving or clothes washing. This process is known as 'induced development' and can lead to changes in the local population and cultural tensions can develop." According to recent studies, the 'boomtown effects' generated by the sudden inflow of large concentrations of construction workers and people generally affiliated with the dam building process into small, remote, often traditional local communities, often result in social, cultural, health problems by placing stress on communal resources.
With respect to the ability for local worker's to organize, IFC documentation indicates that, due to the fact that "this is a greenfield project being undertaken by a relatively new SPV company there are currently no workers' organizations in AGL. It is unlikely that such organizations will become active until the operations phase of the project, as construction will be undertaken by a fluctuating contractor-dominated workforce."
However, the IFC states that "AGL will allow workers to join workers' organizations in future. AGL is committed to non-discrimination and equal opportunity and this will be reflected in the company's HR policy and associated procedures. The company will not make use of child or forced labor and will ensure that its contractors do not either. AGL will develop and disseminate a worker grievance mechanism and ensure that contractors provide the same for their workers. AGL's EHS manager will maintain a record of worker grievances including how grievances were closed out and in what timeframe. Grievance, incident, accident and occupational disease logs will be retained at head office for future analysis and monitoring by lenders or government inspection authorities. "Toolbox talks" on labor regulations and the grievance mechanism will also be held at least twice a year during construction."
With regards to occupational health a safety, project documentation states that "[f]encing will be installed around all construction sites and areas where there is a risk to community health and safety such as excavations. There will be warning signage in Georgian and English (for tourists) in areas which may flood when sediment is flushed or when there is a requirement to release heavy rainfall through the dam. There will also be signage and fencing around all live electrical equipment."
IFC further states that "[a]ccess to construction sites, tunnels, workers' accommodation and the powerhouses during operation will be controlled by fences, gates and security guards. Each site will have entry and exit logs and vehicle access restrictions so that security teams know who and how many people are on site at discrete times in case of fire and so that they can restrict access to project staff only."
With respect to the possibility of abuse by project security personnel, the IFC states that "[t]he project will carry out appropriate checks to ensure that security companies and personnel do not have a history of past abuse. Security personnel will be trained in the appropriate use of force and in applicable Georgian laws. AGL will provide training to security personnel using the guiding principle that force shall not be used except in defense and in proportion with the nature and extent of the threat. The project will not make use of government security personnel."
Additionally, the IFC states that "[i]n case of an injury to project workers, trauma provision will be provided at the new hospitals in Shuakhevi or Khulo. AGL insures all workers for medical treatment and its contractors, through contract clauses, will be required to have medical insurance for all of their workers.
The following questions may be relevant to determining whether you or your community's labor rights have been adversely affected by the investment project:
RIGHT TO FOOD
The ESIA states that "[a]t least 14 species of fish are present in the Adjaristsqali River and its tributaries within the Project Area, attracted by a diverse range of food sources and habitats suitable for spawning and fry as well as adult fish. Two of the species present are protected and could be affected by the Project; the Black Sea trout and Colchic khramulya."
The IFC states that "[i]mpacts on fish and aquatic habitats are anticipated to be most significant as a result of weir and dam wall construction and attendant changes in flow regimes on the affected rivers during operations. 'The 36 m dam to be constructed on the Adjaristsqali river will create a permanent obstruction to up/downstream fish movement (too high for an effective fish pass) and will create a reservoir habitat for 800 m replacing the fast flowing natural stream environment.' Additionally, the 21 m high dam to be constructed on the Skalta river will permanently block fish movement up/downstream (too high for an effective fish pass) and will result in loss of spawning habitat in the reservoir basin and immediately downstream of the dam wall."
Furthermore, the ESIA indicates that "a number of additional potential impacts are associated with the operation of the Project. These include the risk of mortality to newly hatched fry and fish, from entrainment in intake structures and weir grates during downstream migration; and the potential loss of vegetation and macro-invertebrates from water discharges at tail-races. It is also possible that tail-race releases could act as a barrier to fish movement, although the scale of the effect will depend on how quickly the velocity dissipates in the receiving water course and local and seasonal hydrological conditions."
According to the World Commission on Dams, "destruction of community productive bases in agriculture and fisheries can give rise to food shortages, leading to hunger and malnutrition." The International NGO BankWatch reports that in Georgia, "[t]he local economy is based on agriculture, whereby tourism is seen as a chance for diversifying economic activities. The construction of large-scale dams would disrupt local livelihoods, but only bring marginal, if any, benefits for locals."
The following questions may be relevant to determining whether you or your community has suffered a violation of your right to food as a result of the project:
RIGHT TO WATER
Scholars have recognized that, in the same way that dam reservoirs trap river sediment, they also trap most of the nutrients carried by the river and result in oxygen depletion in the water. Water that is "'poor in dissolved oxygen can 'suffocate' aquatic organisms and make water unfit to drink. Dissolved oxygen, furthermore, is vital to enable bacteria to break down organic detritus and pollution."
The project ESIA indicates that, "through construction and operation, the Project has the potential to affect environmental features and human activities that rely on surface and ground water availability and water quality." Specifically, "[i]n relation to the risk of lost water resources as a result of tunneling, potential impact on springs used by communities could be a major adverse impact, but as most springs and users located on old landslip areas have been avoided by the tunnel alignment, this is considered to be a relatively low risk. Where impacts are foreseen they can be minimized by localized tunnel grouting or lining. Where loss of drinking water occurs a temporary water supply will be established so that households are not without drinking water in the short term."
The ESIA states that "[d]uring construction, drinking and general use water will be abstracted from local strings and wells, which are abundant throughout the project area or, where this is not sufficient, supplied by container." Additionally, "[i]n order to rectify loss of drinking water resources in the long term, a permanent alternative water supply will be installed by the project. Water is diverted throughout the Adjaristsqali river and its tributaries for irrigation purposes, usually by means of low-tech intakes (e.g. aligned river boulders) with no hydraulic control structures. However these are typically located on upper tributaries, as the main river lies well below villages' arable lands, hence will not be affected by the project."
The ESIA notes that "[t]here are several human requirements for water from the Adjaristsqali and its tributaries within the Project Area. These include the Asti HPP below Koromkheti; two irrigation schemes; public water supplies for Khulo and Keda from springs and for Shuakhevi (in part) from the river; untreated wastewater disposal for Khulo, Shuakhevi and Keda; and a fish farm below Koromkheti. The water resources also present a number of additional economic opportunities in the form of potential for bottled spring water, milling, subsistence fishing, and tourist and recreational use."
The ESIA noted the vulnerability of water in the region, stating that "[s]urface water quality was measured in 2011 in the vicinity of the Project weirs, dams and powerhouses, against a range of standard parameters. These measurements identified the water as high quality and moderately sensitive to construction and operational activities." However, the ESIA states that "[t]he tunnels proposed for the Project will be cut in hard rock avoiding unstable landslide areas. The springs used by local communities are associated with landslide areas and hence the groundwater is not considered sensitive to Project activities."
The ESIA noted that "[p]otential impacts from the operation of the Project include effects on existing water users from reduced river flows, changes in water quality in the main river system (especially during periods of low flow), changes to the sediment regime with consequent potential impacts on channel shape, and changes in water quality during sediment flushing of the dam system." Additionally, the assessment found "potentially significant effects resulting from the operation of the Skhalta, Didachara and Khichauri dams in the absence of mitigation. The potential for significant effects was considered to arise from changes in river flows and the sediment transport regime immediately downstream of the major dams, in conjunction with the existence of a small irrigation scheme below Khichauri dam that could be affected."
Acknowledging the risks stated above, the ESIA states that "[m]itigation has as far as possible been designed into the Project to enable the avoidance or minimisation of potential significant effects. The needs of all relevant human water users were checked to ensure that their water requirements could be met during the construction and operation of the Project, assuming the incorporation of environmental flow requirements into the operating rules for the Project. Where, as in the case of the existing HPP operator, flow rules were not an option other methods of mitigation have been proposed, including negotiated compensation. Following implementation of mitigation, it is considered that all potential impacts will be reduced to an insignificant level, except those associated with the operation of dams due to reduced river flows. The affected parties would be irrigators and fish farms. These are both very small scale operations and few in number. Compensation for these remaining effects will either be financial or through provision of an alternative water supply."
Despite this, the NGO Transparency International reports that in some villages, problems have developed "concerning the water supply system which apparently was also damaged by construction works. Despite numerous repairs conducted by the locals, the system keeps being disrupted due to the heavy machinery using the road. The local population has demanded for the water supply system be repaired and protected, yet the problem remains unresolved."
The following questions may be relevant to determining whether you or your community has suffered a violation of your right to water as a result of the investment project:
RIGHT TO HEALTH
According to the World Commission on Dams, "[e]nvironmental change and social disruption resulting from large dams and associated infrastructure developments such as irrigation schemes can have significant adverse health outcomes for local populations and downstream communities." Issues include river pollution, vector-borne diseases, and accumulation of high levels of mercury in reservoir fish.
The project ESIA states that "[f]looding of areas will occur during the filling of reservoirs which will result in a risk to local people and their livestock." However, it is stated that "[d]uring the diversion of water for dam construction and the filling of reservoirs, care will be taken by the contractor to ensure that the areas to be flooded are clear of community members and their livestock and other assets. Announcements that flooding will be occurring will be made one week in advance in local village and community centers and via local radio, and village heads will be informed so that word can be spread amongst communities. The AGL Project Manager and support staff will oversee the flooding process in all cases. A warning system will be used during operation when overflow or sediment flushing occurs which will include advance notification to communities via village heads and local radio where possible. Where advance warning is not possible and in every case where significant additional water and / or sediment is to be released through (or around) the dam, a siren system will be used to give people the chance to clear the riverbed of themselves and their livestock prior to the flash flood occurring."
Further, the ESIA indicates that "[t]he construction phase increase in local traffic volumes poses a road safety risk to community members who regularly use roads that the project will need, especially in busy town centers and near schoolsThe ESIA recognizes that" there is potential for cumulative transport effects depending on the construction periods for the planned ski resorts at the Goderdzi Pass, Gomarduli and Goma Mountain and the River Chorokhi HPP Cascade. These projects will also require use of portions of the main S-1 highway along the Adjaristsqali river valley.
The following questions may be relevant to determining whether you or your community's right to health has been adversely affected by the investment project:
RIGHT TO A HEALTHY ENVIRONMENT
"By disrupting the volume and timing of the flow of water, sediments, and nutrients downstream, and by converting riverine and terrestrial habitats to lacustrine [lake] habitats, hydropower dams can have tremendous local and regional environmental impacts." The NGO International Rivers identifies several environmental consequences of large dams, including "direct impacts to the biological, chemical and physical properties of rivers and riparian (or 'stream side') environments. Additionally, dam walls block fish migration and alter a river's flow and sediment transport downstream, which may cause the extinction of aquatic species and upset ecological balance.
Waste
Project documentation states that "[t]he likely waste types from both the construction and operational phases of the Project include solid, liquid, hazardous, non-hazardous and inert wastes." The ESIA states that "the most significant waste stream by volume during construction will be spoil (waste rock) generated via excavation of tunnels, dam foundations, adits and other civil works. The estimated total volume of spoil to be generated through construction of the Shuakhevi scheme is 2.4 million m3. To the extent possible, spoil material will be used for concrete production and as road aggregate, with the balance being disposed of in carefully sited and designed spoil dumps."
To this end, the Project ESIA states that "[s]poil dump sites were identified by AGL via a tailored analysis that focused on minimizing impact on agricultural areas, protecting against erosion and landslip processes, minimizing the potential for downstream flooding and minimizing impacts on landscape features and existing infrastructure." The "[p]otential disposal sites include" dry areas of the Chirukhistsqali, Skhalta, and Adjaristsqali (from Khichauri to Didachara) River beds although alternative options have been considered and could be adopted depending on the outcome of detailed design. The selection of possible sites has considered potential for impact on agricultural areas and existing infrastructure, the potential for spoil areas to protect against bank erosion and landslips, the potential to increase downstream flooding and potential changes to the quality of he landscape. This process will be repeated for the selection of spoil disposal sites for the Koromkheti scheme.
Project documentation further states that "[s]ewage will be dealt with by a combination of modular treatment plants (construction) and septic tanks (operations); the latter will be serviced by the local municipalities, under contract to the company.Some water will be required during tunneling operations, and there may be water make due to groundwater intersections in tunneling operations. Sedimentation ponds will be established to allow sediment to settle out before tunneling water is released. Periodic water quality monitoring will be conducted up- and down-stream of in-stream construction sites during the construction phase. Mobile toilets will be provided during construction, whilst septic tanks will be established for the operational phase."
Air Pollution
The project ESIA states that "a number of Project construction activities do have the potential to release high levels of dust. As there are numerous properties located within 500 meters of these activities it is possible that temporary significant reductions in local air quality will be experienced. In the absence of mitigation to minimise dust releases, significant effects could be experienced at properties within 500 meters of tunnelling operations (as a result of dust from drill and methods) and in locations where spoil will be moved to deposit locations. Due to their proximity, very significant reductions in air quality could be experienced at those properties within 100 meters of construction works for the power cavern and head race tunnel for the Koromkheti scheme." However, the ESIA maintains that "air, dust and noise emissions will be limited to the construction phase and mitigated using standardized mitigation measures laid out in the ESMP. Dust emissions from site roads will be controlled by the use of water bowsers during dry periods."
Regional Hazards
IFC documentation states that "Adjara region as a whole is sensitive to natural hazards including mudflows, erosion and landslides. The project area has historically experienced many landslides, such as the Tsablana landslide in the Skhalta River valley, which killed 19 families. As a result, landslide risk has been a key concern of many local inhabitants. AGL commissioned detailed slope stability / landslide hazard studies during project design, and avoidance of landslides was one of the key considerations driving final design locations of key infrastructure."
Notably, the ESIA has determined that "[a] number of project activities during the construction and operation phases have the potential to increase the risk of landslides. These include blasting for tunnels and creation of cuttings for road construction, other temporary works and deforestation during construction; and from fluctuations in reservoir levels during operation."
Additionally, the ESIA states that "[l]andslides could cause a dam-break event - either by overtopping or loss of structural integrity - with potential for severe impacts on the local population downstream and those inhabiting the landslide risk area itself. Such an event may also occur independently of any of the proposed work. However, as the design has carefully considered and investigated landslide hazard risks to avoid construction taking place in high risk areas, potential for construction to activate landslides is minimal [t]he potential of the Project to trigger seismic activity has been assessed and no risk has been found."
Notwithstanding this conclusion, the ESIA states that "[t]he risk of landslides has been the primary consideration in the location of Project structures during the feasibility and subsequent design stages. Full geological risk assessments were undertaken during the feasibility stage and were used by the design team to ensure that the Project does not increase landslide risks."
Climate
Although dams are often thought of as providing clean energy, "the release of carbon dioxide (CO2) and methane as [reservoir]-flooded trees and plants decompose is a serious cause for concern that needs more investigation." Project documentation states that "[t]he use of construction plant and the manufacture of materials required to build the Project will contribute to greenhouse gas (GHG) emissions. During the operational phase of the Project, only minor GHG emissions are expected to occur given the type of operation." The ESIA goes on to state that "[g]reenhouse gas emissions from the project will be negligible during operations as trees will be removed from the reservoirs during construction so as to avoid methane production from rotting vegetation and power used for ancillary purposes will be taken from the hydropower project itself. Standby generators will be installed but are expected to be used infrequently. The project was registered with UNFCCC as a Clean Development Mechanism (CDM) project on 1 November 2012, becoming the first new build hydro to obtain registration with UNFCCC in Georgia to date. A detailed Project Design Document (PDD) dated August 31, 2012 was prepared for CDM for the combined Shuakhevi Scheme and Koromkheti Scheme. For the Shuakhevi Scheme project to be financed under this investment, using the assumptions of annual electricity generation of 463.7 GWh and the Combined Margin emissions factor of 0.49308 tCO2/MWh, the PDD estimates CO2 emission reduction of the Project as 228,641 tCO2/year."
Flora
The ESIA recognizes that "[t]he Adjara region is well known as being of significant botanical interest with high floristic diversity. The Project Area supports three species that are listed as 'endangered' on the red list of Georgia and Adjara and in total 19 protected and notable plant species are present. Forests and rivers within the Project Area are the most important habitat for biodiversity."
However, "[t]he Project will result in a loss of habitat, primarily through the construction of access roads, laydown areas and site worker accesses. Further habitat will be lost through the creation of reservoirs. Of those habitats that will be affected, the most significant effects will be on the deciduous forests affected by the Koromkheti scheme. This is due to the sensitive nature of the habitats, the high conservation value and the size of area affected. A large number of protected and notable plant species are present in the deciduous forest habitats in the Project Area. The impact on these species due to habitat loss and degradation from the construction activities, particularly access routes and working areas, would be considered significant in the absence of mitigation."
With respect to the Shuakhevi scheme, the project area "includes ten main habitat types, the most sensitive of which are oak forests lining the gorges of affected river valleys; however, as these forests do not fall within the project footprint, direct impacts are not envisaged. The main habitat type to be impacted is riverside grassland and terraces with patches of riverine forest and scrub dominated by alder trees. There will also be a moderate impact on deciduous spruce forest. Three plant species included in the IUCN Red List of Endangered Species occur within the area of influence but all are of low to medium conservation value."
As a result, the ESIA states that "AGL will prepare a habitat removal and reinstatement plan that establishes minimum requirements for reinstatement of natural forests impacted by the project, as part of the construction ESMP. This plan will incorporate measures such as pre-construction surveys of affected species, recording of all felled species and numbers thereof and the use of indigenous species in re-vegetation programs."
Fauna
The ESIA states that [s]ixty-two mammal species were recorded along the Adjaristsqali during the biodiversity surveys for the ESIA, but others are known to be present. Two globally threatened mammal species are located in the Project Area. These are the Eurasian otter, considered rare in the Project Area due to a lack of fish and other food sources; and Mehely's horseshoe bat. Other critically endangered or endangered mammals in Georgia that may be in the Project Area are Eurasian lynx, Brown bear, Red-backed vole, Northern chamois and Wild goat. Jackal and Wild boar have also been confirmed as being present."
The ESIA states that "[w]hile otters are not particularly abundant in the river systems of Adjara, they do occur. During construction it is considered that otters could be affected by physical and noise disturbance, sediment release into the rivers, habitat loss, noise disturbance and from construction activities in the river acting as an ecological barrier. The main impacts on otters during operation are likely to be from the reduced flows in the river system (which may also affect food availability); from dams and weirs acting as physical barriers to otter movement up and down stream; and from loss of terrestrial habitats along the river margins. Before mitigation is taken into account, the possible effects on otters are considered to be very significant."
Additionally, "[b]ecause all bat species are of high conservation value the possible effects on bats during construction are considered potentially very significant in the absence of mitigation. During operation, bats could be affected by the loss of forest habitats (notably tree as roosting sites) due to flooding. Due to the different value of habitats in different areas, significant adverse effects on bats during operation are only considered possible for the Shuakhevi scheme and overall the operational phase will have a lower impact than construction."
Secondary impacts may cause other mammals to be affected "during construction in particular through increased risk of hunting, combined with temporary habitat loss and physical and noise disturbance. During operation, potential impacts are considered limited to habitat loss from reservoir creation, and potential occasional hunting due to the permanent increased access to the area. Potential adverse effects on mammal species other than otters and bats are not considered significant for the construction or operation phases."
To mitigate these effects, "[h]unting and fish by project workers during construction and operation will be prohibited and a number of measures will be taken to minimize impacts on wildlife; e.g., inspection of any large crevices or caves for bats and other species prior to tunneling, checking for otter breeding sites prior to works in riverine habitats in May and June and identification of any nests belonging to birds of prey of conservation significance prior to forest clearing, with subsequent notification of the relevant authorities and associated mitigation measures."
The ESIA asserts that "a Biodiversity Action Plan" has been developed for the project, in consultation with NGOs, lenders, government agencies, expert consultants and others, to ensure that the mitigation measures for biodiversity related impacts associated with the project "a September 2012 workshop on the Biodiversity Action Plan was followed up in September 2013 by a second multi-stakeholder workshop on plan design and implementation. The Biodiversity Action Plan included a critical habitat assessment and concluded that whilst the broader project area, namely the Adjaristsqali river basin, qualifies as critical habitat according to PS 6 due to the presence of a number of high conservation value reptile, bird and plant species, the project is unlikely to have any residual adverse impact on these species."
River Ecology
The ESIA affirms that that "[t]he Project is a large infrastructure development with two schemes spread over a large geographical area. The nature of the Project and the sensitivity of the terrestrial and aquatic habitats and species means there is likely to be a significant impact on ecological and hydrological conditions across the Project Area. In particular, without mitigation the Project is predicted to have very significant effects on biodiversity and ecosystem services along stretches of the Adjaristsqali River and its tributaries downstream of dams, weirs and powerhouses. It is therefore very important that mitigation measures are adopted to avoid, minimize and where it is not possible to reduce effects to acceptable levels, compensate or offset those remaining effects."
The ESIA asserts that "of all the activities associated with the Project: the permanent reduction in the flow of water downstream of weir and dam structures is recognised as having the potential to most greatly affect aquatic ecology and biodiversity. The reduction in flows is considered likely to result in the reduction, alteration or loss of riverine habitats (including spawning areas) and elimination of some slower backwater flood areas which shield some species from predation as well as providing important resting areas."
The Project EIA states that "[t]he types of adverse effects on the aquatic environment that are likely to result from the scheme in the absence of mitigation, include temporary disturbance to, or permanent loss of, river bid habitats (including those suitable for spawning); temporary reductions in water quality and increased sediment loads that could smother eggs downstream on deposition; temporary or permanent prevention of fish migration or movement between different feeding areas; and changes in the river flow that could also affect spawning habitat. The severity of impacts depends on the habitat at each construction location or within the area affected downstream. The most important factors in this assessment are the presence of spawning habitat and the use of the location by migratory fish species. The presence of alternative unaffected spawning sites and the frequency of natural high sediment loads, as may be caused by landslides, are factors that can act to reduce the significance of impacts."
More specifically, "[i]n relation to the Shuakhevi scheme, on the Chirukhistsqali River, significant effects are considered likely to a distance of 13 km downstream from the weir. For the Adjaristsqali, very significant effects are considered likely for the first 9.7 km downstream of Didachara dam, significant effects between 9.7 km and 18.8 km and no significant effects thereafter, in view of this, a minor design change has been initiated to incorporate the Diakonidze River into the Didachara Dam to allow 'spilling' to take place as required to preserve the required flows for water based life and other plant and species associated with the Adjaristsqali River downstream of the Didachara dam. The design of this change will be subject to further environmental assessment. All stretches of the Skhalta are considered likely to experience significant adverse effects, with effects most pronounced in the first 4.2 km below Skhalta dam."
Additionally, "[f]or the Koromkheti scheme, adverse effects on the Adjaristsqali below Khichauri dam were considered most severe in the first 4.7 km downstream, with significant adverse effects on the river continuing through to the confluence with the Chorokhi River. Similarly on the Akavreta, very significant adverse impacts would be experienced for the first 3.4 km below the weir, with the remaining downstream stretches of the river significantly affected to its confluence with the Adjaristsqali.
Taken as a whole, without mitigation the Project is considered to have a very significant effect on fish populations and aquatic ecology, largely as a result of changes to river flows."
In summation, "[c]onsidering the potential construction impacts for the Project as a whole, without mitigation it is considered that the Project is likely to have a significant effect on the aquatic ecology of the river system, including impacts on the fish population, and spawning habitats. Effects on protected fish species are also considered significant due to the medium conservation value of affected species, such as Brown trout." The ESIA states that "[t]o address these issues further, a range of compensatory and offsetting measures will be implemented:
The ESIA concludes that "[w]ith the introduction of these measures it is considered that in the short to medium term, significant but reduced impacts will remain in relation to riverine/aquatic habitats, and also potentially in relation to otters."
The following questions may be relevant to determining whether you or your community has suffered a violation of your right to a healthy environment as a result of the investment project:
RIGHT TO PROPERTY & ADEQUATE HOUSING
Large dams have been associated with adverse social impacts resulting from involuntary displacement. The World Commission on Large Dams reports that the construction of large dams has resulted in the involuntary displacement of between 40-80 million people worldwide. This estimate refers only to physical displacement, and does not include communities that have suffered[livelihood displacement, meaning that they were forced to move after losing or having reduced access to resources that formerly sustained them.
In Georgia, human rights violations reports in the 2012 Human Right Report "included allegations of property transfers to the government under duress and improper government use of eminent domain to seize private property." Additionally, "[t]here were concerns about the lack of due process and respect for the rule of law in a number of property rights cases. During the year NGOs, business owners and citizens reported property rights violations, particularly in newly developed touristic regions."
The project ESIA states that "[t]he project is not expected to result in the physical displacement (relocation) of any households." Although temporary land acquisition will be required "for worker accommodation camps, lay-down areas and similar is not deemed to be involuntary because the Project does not have the right to expropriate this land if owners are unwilling to lease or sell it. It is anticipated that approximately 20,000 m2 of the scheme's temporary land requirements will be met via such voluntary lease agreements."
Additionally, "[t]he Project will require the permanent use of land that is currently used by local people either formally or informally, for other social or livelihood purposes. There are potential risks to the local population from the purchase of land in the absence of appropriate management. In the worst case, people could be required to leave home against their wishes, or they may be inadequately compensated for lost land and / or income." The ESIA states that in order "[t]o avoid adverse effects, AGL will carry out land transactions through negotiated settlement. The formal process is established in AGL's Land Acquisition and Resettlement Framework (LALRF) that has been produced in accordance with IFC guidelines."
In contrast, "[e]conomic displacement in the form of permanent land acquisition and/or permanent impact on local livelihoods' is considered to be involuntary due to the project's right to expropriate the necessary land." The ESIA states that "[i]n practice, however, the project has relied upon negotiated settlements in all cases and has not needed to resort to expropriation."
In total, "[t]he project is expected to require permanent land acquisition from 402 households and 1 commercial business (a filling station), in addition to lands owned or managed by the state. The total area of privately owned land to be acquired is 49.4 ha. Of the affected households, only 47 (12%) have arable land plots that will be affected by the project; the remaining plots are largely unused for livelihood purposes, with the exception of some communal grazing usage. Much of the affected land in the dam reservoir areas is rocky and/or forested and is not actively used, though it was claimed by households during the compensation process. The 47 arable land plots affected were mainly impacted by road construction/rehabilitation near villages." However, the ESIA states that "[n]o crop losses are anticipated as the project has signed and paid for options contracts on each plot of land which requires that no further development take place on the land. Around 100 of the affected households will also lose fruit trees (607 trees in total)".
The ESIA states that "[l]and prices for compensation purposes were established via two market valuation surveys undertaken by third party experts. AGL used the highest assessed value in each case in offers to affected households. In addition, recognizing that many households in the area are living below the poverty line and dependent upon state pensions and allowances, AGL will pay each affected household an additional allowance equal to 10% of the market value of land being acquired."
With respect to trees "prices were established by external experts in consultation with agronomists. In addition to land and tree surveys, AGL's land acquisition team undertook a 100% household census of affected households (in June 2012 and March 2013) and their assets, including photographs of assets. Simultaneously, a socio-economic survey covering the major socio-economic features of the affected population was undertaken, however it covered only 25% of affected households."
The ESIA states that in the land acquisition process, "[l]ack of formal land title was not a bar to compensation; instead, AGL assisted those households with no formal land rights to obtain such rights and all affected households were treated equally. Options agreements were signed with each household, based on an up-front payment by AGL giving them right of first refusal to purchase the affected land. Cut-off dates for compensation purposes were based on options agreement signing dates."
The ESIA further states that "[g]iven the small number of households losing a portion of their arable land, and the clear preferences of affected communities, compensation for land and tree losses is being paid out in cash on the basis of negotiated settlements. A financial planning service provider will be contracted to assist affected households to use their compensation proceeds wisely so as to ensure no negative impact on their livelihoods. AGL is also investigating the need to create access to alternative grazing land to replace communal grazing land to be lost through inundation (although this land has already been compensated for to individual households who claimed it)."
Cash compensation alone however typically results in impoverishment or pushes people deeper into poverty. According to the United Nations Basic Principles &Guidelines on Development-based Displacement & Resettlement, "[c]ash compensation should under no circumstances replace real compensation in the form of land and common property resources. Where land has been taken, the evicted should be compensated with land commensurate in quality, size and value, or better."
The NGO Transparency International reports that in several villages, villagers have complained of low compensation for property and trees, and have also "claimed that their houses have been damaged, not to mention the road itself [as a result of heavy machinery being transported to the site]. In spite of this, the company has not yet conducted maintenance works to either the road or houses."
The following questions may be relevant to determining whether you or your community's right to property and adequate housing has been adversely affected by the investment project:
RIGHT TO CULTURE
Project documentation states that "[c]ultural heritage impacts were assessed during the ESIA via both desktop review and field walkover surveys. The project has been designed in such a way as to avoid inundation of any notable cultural heritage features."
The ESIA states that "[t]he locations of known cultural heritage sites have been identified and avoided in the Project design. There are two monuments located within 200 meters of below-ground tunnel positions, but due to the depth of tunnelling there is no potential for the monuments to be affected." Specifically, "two recorded historical remains were identified close to the Shuakhevi scheme development area, namely the Middle Ages fortresses of Selim Khmshiashvili and Diakonidzeebi Village. Neither of these remains fall within 200 m of any planned construction works and thus no direct adverse impact is expected on either."
However, the assessment acknowledges that "[a]lthough there are no recorded cultural heritage assets relating to buried features and deposits in the study area have been identified, this may be because the area has not been extensively studied to date and it is considered likely that such deposits exist. The most likely areas for survival of such features and deposits would be the flatter, low-lying areas of modern settlement, areas where project construction facilities and contractor colonies will be located, as well as at tunnel adit sites which will be excavated." The client has developed 'chance finds' procedures in accordance with Georgian regulations and IFC requirements to deal with this eventuality."
Therefore, "[t]here remains the potential for previously undiscovered, buried archaeological remains to be severely impacted by the Project in the absence of mitigation. Human occupation during the historic and pre-historic periods has been recorded along the major river valleys of Georgia. Although not formally investigated, it is considered likely that the Adjaristsqali valley was similarly occupied and it is highly likely, given the archaeological and historical background of the region that previously unrecorded and or buried cultural heritage assets survive within the Project Area. The most likely areas for their survival would be in the flatter, low-lying areas of modern settlement."
In the context of project activities, "[u]ndiscovered archaeological remains could be damaged through any construction activities that break surface ground, including road widening, dam construction, reservoir construction and submergence, tunnel access portals, creation of construction facilities including worker housing, quarry excavation and utilities provision such as trenching of communication cables. To mitigate against significant impacts on archaeology, a chance find strategy will be implemented during all groundworks for the Project, with the exception of tunnelling involving drill and blast methods. Any archaeological finds and sites will be reported immediately to the Georgian National Cultural Heritage Agency and to the Cultural Heritage Preservation Agency of Adjara."
The following questions may be relevant to determining whether you or your community's right to culture has been adversely affected by the investment project:
The investment project consists of an equity investment by Tata Power International Pte. Ltd. of Singapore in the Adjaristsqali Hydro Project in Georgia.
MIGA provides political risk insurance (guarantees) for eligible projects in order to allow investment in emerging markets. The investor has applied for a MIGA guarantee of $64 million for a period of up to 15 years against the risks of transfer restriction, expropriation, war and civil disturbance, and breach of contract. MIGA documentation indicates that "the International Finance Corporation (IFC), the European Bank for Reconstruction and Development, and the Asian Development Bank are expected to provide debt financing for the project."
A MIGA guarantee against risk of transfer restriction "[p]rotects against losses arising from an investor's inability to legally convert local currency (capital, interest, principal, profits, royalties, and other remittances) into hard currency (Dollar, Euro or Yen) and/or to transfer hard currency outside the host country where such a situation results from a government action or failure to act."
A MIGA guarantee against expropriation "[p]rotects against losses arising from certain government actions that may reduce or eliminate ownership of, control over, or rights to the insured investment. In addition to outright nationalization and confiscation, "creeping" expropriation a series of acts that, over time, have an expropriatory effect is also covered. Coverage is available on a limited basis for partial expropriation (e.g., confiscation of funds or tangible assets)."
A MIGA guarantee against war and civil disturbance "[p]rotects against loss from, damage to, or the destruction or disappearance of, tangible assets or total business interruption (the total inability to conduct operations essential to a project's overall financial viability) caused by politically motivated acts of war or civil disturbance in the country, including revolution, insurrection, coups d'état, sabotage, and terrorism."
Lastly, a MIGA guarantee against breach of contract "[p]rotects against losses arising from the government's breach or repudiation of a contract with the investor (e.g., a concession or a power purchase agreement)."
Overall, "[t]he total project cost is estimated to be US$427 million ($367 million excluding financing costs). It will be developed by Adjaristsqali Georgia LLC (AGL), a special purpose vehicle owned by Clean Energy Invest of Norway, Tata Power of India and IFC Infraventures."
The IFC indicates that "[t]he SPV was established for the purpose of constructing and operating a cascade of hydroelectric power plants on the Adjaristsqali River. The cascade was originally proposed to include three phases, namely the 185 MW Shuakhevi scheme, the 150 MW Koromkheti scheme and the 65 MW Khertvisi scheme. However, detailed assessments of each of the phases identified significant economic and environmental risks in the Khertvisi scheme, including potential impacts within the boundaries of the planned Machakhela National Park. As a result, AGL has confirmed that, although it retains the concession for the Khertvisi scheme, this scheme will not be pursued."
However, documentation reflects that "AGL intends to construct the Shuakhevi and Koromkheti schemes in sequence, with financing being sought initially for Shuakhevi (this investment). If developed, the downstream (Koromkheti) scheme will comprise a 19 m dam and reservoir on the Adjaristsqali River; two weirs (an 8 m weir on the Chvanistskali River and a 5 m weir on the Akavreta River); a 0.67 km tunnel from the Chvanistskali River; a 9.5 km tunnel from the Akavreta River to the Koromkheti reservoir; and a 15 km tunnel from the reservoir to an underground powerhouse near Koromkheti village, then back into the Adjaristsqali River."
Adjaristsqali Georgia LLC (AGL)
Jeff Terry
Director
Health, Safety & Environment
Georgian Mobile: +995 577 50 54 65
Email: mailto:jeff.terry@agl.com.ge
http://www.agl.com.ge
CONSULTATION PROCESS
The IFC documentation reflects that "environmental and social impact assessment (public) scoping meetings began on July 19 and 20, 2011, with four meetings in key municipalities and six village meetings. Further meetings have been held in 2012 and 2013 to discuss ESIA findings and associated mitigation measures. AGL has also held/hosted a series of smaller, focused meetings and workshops with key informants and groups that began in September 2011 and have continued to date. For example, dedicated meetings with NGOs focused on environmental and social matters were held in 2011, 2012 and 2013 to present the project, development team, proposed studies and impacts, mitigation measures, etc., and to capture NGO feedback and input."
The IFC also indicates that "[f]ocus group meetings and discussions have been held with vulnerable groups, municipal leaders, affected landowners and women's groups throughout the process. A stakeholder workshop on the Biodiversity Action Plan (BAP) was held on 14 September 2012, aiming to identify and/or verify key conservation objectives, baseline information gathered and associated mitigation measures. This workshop, along with the NGO meetings held, led directly to the involvement of several conservation-focused NGOs in project monitoring, as described above in the PS6 section. Another stakeholder workshop on the Biodiversity Action Plan was held on 10 September 2013 to update the stakeholders of the biodiversity mitigation measures and monitoring programs, and to seek suggestions from them."
The project's environmental and social impact assessment states that "[t]he views of local people on the Project have been sought and considered through formal stakeholder engagement activities that commenced at the start of the ESIA process. Stakeholder engagement activities undertaken and planned for the future are documented in the Stakeholder Engagement Plan." The "[k]ey concerns raised during public consultation in affected communities were related to potential project impacts on local climate; land acquisition and compensation; landslide risks; water levels in the river; employment opportunities and whether the communities were to benefit from low electricity prices. Regarding concerns as to whether the project would have an effect on the local climate by increasing humidity, as no large reservoirs are part of the scheme design the effect on local climate is considered to be minimal."
Additionally, documentation reflects that "[t]here was also a general concern on the possibility of erosion and the likelihood of landslide activation and whether the AGL would take responsibility for any repercussions these effects may cause. The project development team has stated that great care was taken during project design to assess the potential land slide risk areas, and the scheme has been developed and modified to limit risks on any sensitive areas. As a result, only low risk sites were chosen to position the dams/weirs, reducing the likelihood of landslides to a minimum. If an event resulting from the scheme does occur, AGL will take responsibility."
The IFC also states that "[t]he project was perceived by some stakeholders to have a negative effect on water levels particularly in the Adjaristsqali River, potentially affecting communities' water supply and sewage systems. Although the project will affect overall existing water levels, the greatest impacts will be close to the dam sites (i.e. far from settlements) and a minimum ecological flow will continue to be released at each dam, in addition to additional inflows from side streams and tributaries along the Adjaristsqali, reducing the risk of impacts to water supply systems."
The environmental impact assessment states that "[q]uestions in relation to land acquisition and compensation measures were raised consistently. Each municipality was informed of AGL's intention to treat all land owners and users equally and offer compensation to all whether or not they had legal entitlement to the land. Land prices were to be determined based on market valuation undertaken on each land plot by a local real estate valuation company. Further details were provided in a leaflet distributed during the meeting, which contained the contact details of AGL's Community Grievance Officer."
According to the ESIA, with regards to land resettlement, "[t]he Land Acquisition and Land Resettlement Plan describes a step-wise process for consultation and engagement with affected parties and a list of parties involved. In addition to affected households, AGL consulted with municipal authorities, community leaders, forestry agency staff in Batumi, Adjara Republic leaders, the Association of Professionals on Land and Property, the Ministries of Energy and Economy & Sustainable Development, the Kobuleti Vocational Center and two private valuation companies (Expert XXI and Cirtus and Chai Ltd). When household heads were interviewed, AGL distributed a land acquisition handbook describing the project, land acquisition principles, eligibility for entitlements, institutional arrangements and the grievance procedure for land acquisition related complaints."
Additionally, the ESIA states that, "AGL undertook additional consultations with affected households. All municipalities raised the question of whether they would benefit from either free or low electricity prices. They were informed that electricity prices are set by the authorities at national level and that AGL has no power over this matter. Employment opportunities and re-training of the local population was brought up during most consultations. AGL conducted professional skills surveys in affected municipalities and operates a vocational training center in the Khulo municipality in collaboration with Kobuleti public college, with the aim of maximizing local hiring during the construction and operational phases of the project and assisting those most impacted by the project to gain additional benefits."
Documentation also provides that "AGL appointed a Community Liaison Officer early in the process to provide a day-to-day interface with affected communities and other key stakeholders. Other project team members have been involved in consultations, as have the ESIA consultants. Each main contractor will be required to have a person responsible for community liaison and grievance redress. AGL has disclosed key ESIA documentation and updates on its website as well as at strategic locations in the project area and in Batumi. Local and national newspapers and radio channels have been used to advertise public meetings at least two weeks before each has occurred."
Additionally, project documentation pledges that "[c]ommunity health and safety education campaigns will be undertaken commencing in the construction phase and ongoing into the first year of operation of each scheme, covering the following key issues: flooding during construction; fluctuating water levels associated with overflow and sediment flushing; road safety awareness; risks such as transportation and potential spillage of hazardous materials including chemicals and explosives; HIV/AIDS awareness; site safety awareness and access restrictions. Community education programs will take place in schools and community centers such as village halls and municipality buildings."
Lastly, project documentation states that, in order to handle any complaints arising from the project's activities, "AGL developed and disseminated a formal project grievance mechanism early in project development. This mechanism is described in the ESIA and Stakeholder Engagement Plan and has been presented to affected communities and other stakeholders. The Community Liaison Officer's contact details have been disclosed to affected stakeholders in meetings and via disclosed materials and the project website. This officer will manage the grievance mechanism (e.g. logging grievances received using the standard template and/or verbally, coordinating responses, etc.) and will also be responsible for coordinating ongoing stakeholder engagement efforts summarized in the Stakeholder Engagement Plan."
ACCOUNTABILITY MECHANISM OF MIGA
The Compliance Advisor Ombudsman (CAO) is the independent complaint mechanism and fact-finding body for people who believe they are likely to be, or have been, adversely affected by an IFC or MIGA- financed project. If you submit a complaint to the CAO, they may assist you in resolving a dispute with the company and/or investigate to assess whether the IFC is following its own policies and procedures for preventing harm to people or the environment. If you want to submit a complaint electronically, you can email the CAO at CAO@worldbankgroup.org. You can learn more about the CAO and how to file a complaint at http://www.cao-ombudsman.org/
