1. Environmental and Social Due Diligence
Wind Farms and the Environment
impact on birds and bats
Summary of EBRD/IFC E&S due diligence requirements
Serbia May 2015
Robert Adamczyk
European Bank for Reconstruction & Development
Environment and Sustainability Department
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2. Why do environmental and social issues matter to the EBRD and IFC
Agenda
Why do environmental and social issues matter to the EBRD and IFC
EBRD approach to environmental and social due diligence
Summary and discussion
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3. Why do Environmental and Social Issues Matter
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Why do Environmental and Social Issues Matter
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4. Environmental and social due diligence
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Environmental and social due diligence
Environmental and (increasingly) social issues pose substantial reputational and financial risk to Lenders
IFI’s do environmental and social due diligence on all projects
Due diligence designed proportional to risk
Projects ultimately required to meet national standards and IFI requirements and EU;
Why EU standards – EU accession process, European Energy Community, EBRD requirements…
Results of due diligence and E&S compliance considered by Bank management and Board of Directors during project approval process
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5. Environmental and Social Policy (2014)
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Environmental and Social Policy (2014)
E&S Policy applies to Bank
Categorization of Project based on risk and EU EIA requirements (Annex 1 projects)
10 Performance Requirements (PRs) apply to all clients and projects
EBRD PRs have same titles and are broadly equivalent to IFC Performance Standards
Also broadly equivalent to Equator Principles
Reference to EU environmental standards
Policy and PRs currently under review for updating in 2014
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6. Stakeholder engagement and consultation
Always important
All projects are disclosed for meaningful engagement, prior to Bank approval: A vs B, public vs private
May require more than national EIA
Category A projects require participatory engagement (meetings)
Engagement with local stakeholders needed, including NGOs
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7. PUBLIC
The risk is real
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8. EBRD approach to due diligence for wind power project
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EBRD approach to due diligence for wind power project
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9. EBRD and IFC due diligence
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EBRD and IFC due diligence
Each project different
Assessment of cumulative issues and site sensitivity
Need to develop Stakeholder Engagement Plan (SEP) and Non Technical Summary (NTS) to ensure meaningful public consultation on all projects
IFI’s unlikely to finance projects that are in sensitive bird areas (inclusive Natura 2000 etc).
We will not finance projects where appropriate assessments conclude there are significant unavoidable adverse impacts
Major projects: ESIA, SEP, NTS disclosed for at least 60 days (private sector, 120 public sector)
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10. Scope of Due Diligence Adequacy of Bird and Bat assessments
Cumulative impacts
Eg. Via Pontica
Migratory bird issues
Breeding and wintering birds
Noise and Landscape issues
Public consultation
Does it meet EU Standards?
Poor EIA could result in annulment of building permit and/or delays in due diligence.
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11. PUBLIC
Bird Migratory issues
Some Projects can be located in key bird migratory corridors of international importance
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12. PUBLIC
PR1: Appraisal (1)
All EBRD projects are subject to appraisal of potential environmental and social impacts
A-Category projects undergo “special formalised and participatory assessment processes”, generally a “comprehensive environmental and/or social impact assessment.”
Greenfield and major expansions that can cause significant adverse effects are Category A.
B-Category projects also undergo due diligence process to identify and assess potential future impacts.
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13. PR1: Appraisal (2) Is it Category A or B?
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PR1: Appraisal (2)
Is it Category A or B?
Some EU countries use number of turbines and/or megawattage as thresholds
Former rule of thumb was “A” for > 50MW. now threshold is roughly 100MW (and under discussion)
Transmission lines could trigger A category
EBRD has few hard and fast rules
We can usually tell an “A” when we see it, or a “B”. Not always.
Direct effect on Natura 2000 triggers A-categorization
Otherwise, decision generally based on consideration of size, location, and associated facilities.
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14. Performance Requirement 6
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Performance Requirement 6
Committed to Biodiversity Mitigation Hierarchy that encompasses the precautionary principle
Guided by applicable international law and conventions and relevant EU Directives
Key EU Directives: EIA Directive, SEA Directive, Habitats Directive, and Birds Directive
EU Guidance: Wind energy developments and Natura 2000
Screening assessment (potential significant effects?) See next slide, too
Appropriate assessment or equivalent
Compensation if needed
In CEE, Poland has been developing guidance for wind
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15. PR6: EBRD due diligence (1)
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PR6: EBRD due diligence (1)
Require independent assessment of risks to birds and bats, regardless of proximity to Natura 2000 or other known protected/sensitive areas
Require independent assessment of available data, including previous monitoring and possible cumulative impacts
When possible, consult with local affiliates of Birdlife International
Along Via Pontica, EBRD provided funding for:
Strategic Environmental Review of wind development in Bulgaria in 2010
SER for coastal counties of Romania
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16. PR6: EBRD due diligence (2)
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PR6: EBRD due diligence (2)
Pending completion of SER in Romania, all large projects along Via Pontica are Category A
Sponsored SER for renewables, including wind, in Ukraine
similar SER in Kazakhstan
May consider SER for other countries, including SEMED (Jordan, Egypt)
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PR6: EBRD challenges
EU guidance calls for four seasons of monitoring data.
Two issues:
Are data for 4 seasons sufficient to assess impacts and significance?
Are all data needed before approval?
Further monitoring and independent evaluation of results are ALWAYS required, including several years of operation (mirrors Poland guidance calling for 3 years post construction)
Some countries of operation are EU members. Even so, authorities may be less than rigorous in applying EU Directives
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18. PR6: EBRD challenges (2) Most countries of operation are not in EU:
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PR6: EBRD challenges (2)
Most countries of operation are not in EU:
What areas are equivalent to Natura 2000 areas?
What species are equivalent to those listed in Annex I?
Who is the competent authority?
Ensuring coverage of all project and cumulative impacts:
Phased construction
“Salami-slicing”
Multiple regional developments
Associated facilities (transmission lines, substations, control center, roads), some of which may be developed by others
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19. PR6: Future challenges and opportunities
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PR6: Future challenges and opportunities
Consolidated monitoring data at regional, national, international level
Formats
Quality assurance
Who would sponsor and champion, and then maintain system?
Regional multi-sponsor radar systems
Who could or would be the champion?
Difficult to implement and fund
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20. Summary and Conclusion
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Summary and Conclusion
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21. Experience to date in Countries of Operation
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Experience to date in Countries of Operation
Projects developed in staged approach (i.e MW wind farm broken down in 20 MW section – Bank asked to finance 20 MW)
EIA needs to assess full project including infrastructure.
Natura 2000 areas not well defined
EU is commencing infringement action against Romania. This could affect EU funding of wind power in New EU Member States (EIB, EU structural funds etc)
Permitted projects developed by locals are being marketed to international companies
Poor EIA could affect the future value of the asset, and permits can be withdraw or operators asked to reduce output.
Lack of cumulative assessments and ornithological studies
Lack of these studies could annul the EIA and permit (European Court of Justice)
NonTechnical Summary is a requirements of all IFI’s and the EU EIA Directive
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22. Key issues Bat monitoring: This is not usually done in all countries.
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Key issues
Bat monitoring: This is not usually done in all countries.
Zoologists (in some countries the ministry requires Doctorate degree in zoology) but they often don’t have the expertise in this field;
Lack of experienced ornithologists.
In some countries there are only few ornithologists. This becomes a bottleneck in some projects.
Assessment and survey methodology is not well defined.
Method is mostly determined by the experts but our experience so far is that the quality is quite low in bird assessments done locally. The assessment reports are usually qualitative assessments, mostly short, without much quantitative assessment.
Social Assessment, and inclusion of local populations
Will the local community benefit- any local taxes to local community ?
Is this a long term risk
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23. PUBLIC
Way forward
Developers as part of Local Wind Association should develop dialogue with stakeholders and develop best practice guidance
BirdLife/Local Ornithological Society keen to assist
Should also address bats
Local inclusion and how to support local (often underdeveloped) communities
Strategic Environmental Assessment (SEA) is recommended for sensitive areas eg. Dobrogea area of Romania
Ultimate goal: local guidance on how and where to develop wind farms, and on cumulative assessment
Developers need to be more aware of designated protected areas, such as IBA’s, Natura 2000 etc
Developers should screen consultants carefully for expert ornithologists and past success both in successful local permitting AND in satisfying IFI due diligence requirements
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