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Adjaristsqali Georgia LLC
Environmental & Social Review Summary

This Environmental and Social Review Summary(ESRS) 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 ESRS 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.
Project number 33435
Country
Georgia
RegionEurope and Central Asia
SectorV-BA - Large Hydro - Renewable Energy Generation
Department
Company nameADJARISTSQALI GEORGIA LLC
Environmental category:A - Significant
StatusActive
Date ESRS disclosedOctober 3, 2013
Last Updated DateOctober 19, 2015
Previous EventsInvested: November 7, 2014
Signed: May 20, 2014
Approved: May 1, 2014
View Summary of Investment Information (SII), click here

OverviewE & S Project

Categorization

and Applicable

Standards
E&S Risks /

Impacts and

Mitigation
Stakeholder/

Engagements
BCSE & S Action

Plans
Availability

of Full

Documentation

Project Description
The proposed investment 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 scheme is located in the Adjaristsqali region of the Autonomous Republic of Adjara in southwest Georgia. The Shuakhevi scheme will also 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.

The 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 (SPV) owned by Clean Energy Invest of Norway, Tata Power of India and IFC Infraventures. The 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. 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.

Five construction contractors have been selected through tender for the Shuakhevi construction phase, covering preparatory works (road and bridge construction and rehabilitation, site preparation at construction and accommodation sites, establishment of water supply and waste water treatment systems, etc.), electrical works, mechanical works and civil works. Tunnelling will be achieved using conventional drill and blast.

The 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. This 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. This 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 an ESIA for the transmission line development.
Overview of IFC's Scope of Review
In accordance with IFC Access to Information Policy, earlier drafts of the Project’s Environmental & Social Impact Assessment documents were disclosed as “Early Disclosure” (the link provided below) at IFC’s website on May 24, 2013.
http://www.ifc.org/wps/wcm/connect/corp_ext_content/ifc_external_corporate_site/ifc+projects+database/projects/disclosed+projects/georgia_33435

Appraisal of this Project included review of the following documents:
• Environmental Impact Assessment (EIA, prepared for Georgian authorities, 2013)
• Environmental & Social Impact Assessment (ESIA, prepared for international lenders), 2012 and 2013
• ESIA Non-Technical Summary (NTS, 2013)
• Stakeholder Engagement Plan (SEP, 2013)
• Land Acquisition & Livelihood Restoration Framework (LALRF, updated 2013)
• Land Acquisition & Livelihood Restoration Plan (LALRP, 2013)
• Environmental & Social Management Plan (ESMP, 2013)
• Biodiversity Action Plan (BAP, 2013)
• Several management plans containing mitigation and monitoring measures for noise, ecology, cultural heritage and chance finds, spill prevention and chemical storage, air quality, traffic, labor accommodation, labor grievances, construction waste, erosion and sediment control, water quality and water resources management, spoil disposal and construction management, among others.
• An Environmental & Social Due Diligence (ESDD) Report on the proposed project compiled by Arup, a reputable independent environmental consultancy, on behalf of IFC, EBRD and ADB in August 2013.

An appraisal mission was held in May 2013 involving Environmental and Social (E&S) specialists from IFC, European Bank for Reconstruction and Development (EBRD) and Asian Development Bank (ADB). This mission included visits to key project infrastructure sites, a meeting in Batumi with local and national conservation-oriented NGOs, meetings with leaders and elders of the two affected municipalities and associated villages, meetings with key project personnel, discussions on gaps in draft project E&S documentation and briefings with the Sponsors’ UK-based consultants Mott MacDonald. IFC and other lenders provided iterative input to the E&S documentation listed above for several months leading to this disclosure.

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