Adjaristsqali Hydropower Project

Semi-annual Environment & Social Monitoring Report (July to December 2018)

Environmental and Social Performance Report December 2019

GEO: Adjaristsqali Hydropower Project

Prepared by Adjaristsqali Georgia LLC

The Environmental and Social Performance Report is a document of the borrower. The views expressed herein do not necessarily represent those of ADB’s Board of Directors, Management, or staff, and may be preliminary in nature. Your attention is directed to the “Terms of Use” section of this website.

In preparing any country program or strategy, financing any project, or by making any designation of or reference to a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.

SEMI-ANNUAL ENVIRONMENTAL AND SOCIAL MONITORING REPORT

REPORTING PERIOD: 01 July 2018 – 31 December 2018

TABLE OF CONTENTS

Sr No Chapter Page No

1 Certification …………………………………………………. 3 2 Summary ……………………………………………………. 4 3 Compliance evaluation …………………………………….. 7 4 Major environmental and social achievements …………. 8 5 Major challenges and issues for the Company …………. 9 6 Key Project implementation data relevant to E&S ……… 11 performance evaluation 7 Compliance with IFC Performance Standards / ………. 12 EBRD Performance Requirements / ADB Safeguard Policy Statement (SPS)

Annexure 1 HSE Performance Indicators ……………………………… 33 Annexure 2 Construction Phase Environmental and Social Action Plan (ESAP) as per Schedule 12 ……………………. 37

2. Summary:

Clearing of spoils from the blockages by re-mining commenced in H1 was continued with adequate caution keeping safety adherence at highest priority during H2. Out of the 6 major rock falls / full collapses in various sections of the Head Race Tunnel (HRT) and 2 full collapses (which were earlier thought to be one collapse) in the Skhalta Didachara Transfer tunnel (SDTT), four blockages in HRT and both blockage Locations in SDTT were cleared in H2. A comprehensive program of further detailed inspections, investigations and rock testing was continued to confirm and verify the geological features of the rock strata in various sections of the tunnels to ascertain the required remedial support works. The Civil Contractor, AGE had continued to augment its equipment and manpower in H2. Work was carried out on several fronts in the HRT and SDTT in parallel. MML also continued its investigation & supervision during this period. In view of this detailed investigation & repairs in the HRT & SDTT Tunnel, it was decided to extend the investigation also in Chirukhi - Skhalta tunnel with opening of work front in Skhalta outlet section.

As of date, the program of investigation and testing is in progress with significant part of the HRT having being already inspected and many test results on several rock samples have been received. Further inspections in the SDTT have been carried out as blockage was cleared and water drained from major part of the 9 km tunnel.

During this period, AGL has also engaged the services of 3G (Austria) for onsite supervision and Prof Luiz De Mello to advise AGL by reviewing MML’s assessment of the root cause and the proposed remedial design. A workshop was conducted in September 2018 during which MML presented further updates on potential causes of the failures observed and learnings while clearing the collapsed areas. The same was discussed in details while emphasizing the primary importance of health and safety aspects. The final design for the support work is reviewed and finalized after receipt of a major portion of the results of geological tests. It is envisaged that the tunnel repair works shall be completed by the second quarter of 2019, with the finalisation of support structure design and extent of tunnels to be repaired in all the three sections of Tunnels.

Below is a summary of construction works for the reporting period:

Civil Works: The civil works remaining in Skhalta, Didachara & Shuakhevi PH have been continued to complete attending to Punch lists, and reach handover stage.

Tunneling Works: All tunnels in the project have been de-watered and inspected. - Didachara - Shuakhevi HRT & HPHRT Works have been taken up for Stage 2 Repairs. (S2R) Access at Chanchkhalo was established in Oct 2018. - Repair works in the SDTT started in Oct 2018 and access from Intake side was also established in Nov 2018. - Minor repair works at intermediate stretches of Chirukhi-Skhalta Tunnel commenced from Skhalta side in Oct 2018.

As of end of December 2018, the status of inspection was as follows:

Figure 1 Status of Repairs & Inspection

Only two major blockages at the chainage 11900 and chainage 4200 remains to be cleared. While the blockage at chainage 11900 is expected to be cleared in January 2019, the blockage at chainage 4200 will take longer and expected to be cleared by end-March or m-d-April 2019.

Didachara dam area: Didachara reservoir was drained and no water was stored in the reporting period as access to Skhalta - Didachara Tunnel Outlet section was established and work continued. Road construction on the downstream side of Ghorjomi bridge has been completed and procedure to handover this with joint inspection in consultation with the Roads Department of Georgia is advancing as planned.

Skhalta dam area: Skhalta reservoir was drained and river water is now flowing through flood discharge tunnel to facilitate inspection and attending to repairs in Skhalta - Didachara Tunnel.

Skhalta Power House: Chirukhi to Skhalta tunnel is also drained and access plug dismantled at Skhalta outlet side. The E&M contractor, CKD, has demobilized and will be back at site after the tunnel is filled and the 35 kV line is nearing completion. Until such time CKD has provided preservation plan for the equipment in power house which is being taken care by AGE (under AGL supervision), weekly checks being carried out as per the plan. As part of this plan, CKD carried out manual rotation of the units and inspected various instrumentation signals. It is expected that the commissioning activities of the Skhalta power house shall start by July 2019 after completion of 35 KV transmission line and Chirukhi - Skhalta Tunnel Repairs.

Chirukhi Weir: Weir construction is complete and Radial Gates on weir & Desander flushing gates remain open to pass the river flow.

Ghorjomi Bridge: Bridge and approach road works are complete. 5

Diakonidze Weir: AGL has carried out a water balance study for the Diakonidze stream. E-flow assessment has been suspended for now and will be restarted after full funding is made available for the Project. The assessment will be presented to the E&S teams of lenders before moving forward to the scheme. Based on the joint consensus on the approach, work will start, and adequate monitoring system will be put in place. Possible alternatives to explore transfer of Ghorjomi stream water to Didachara Reservoir or transfer the water in the HRT is being evaluated by desk study. These will be reviewed and taken up once the clarity on funding is available.

EM Works: Preservation and maintenance activities are being carried out as per plan submitted by GE and AGL's maintenance plan. Work on attending to punch list related to Shuakhevi by AGL is underway. Subsequent to the runner inspection by AGL, MML, GE, Norconsult and SWECO, it is envisaged that repair works would be required on the Runner to address pit marks. Discussions with GE are in progress. Gap analysis review has been carried out to identify infrastructural requirements for Operational readiness. GE representative has demobilized from site in Dec 2018. Skhalta commissioning discussions with CKD, GE and MML have commenced.

35 kV Transmission Line: Out of total 133 towers, 75 foundations and 66 towers were completed in H1 before works were suspended. AGL lifted work suspension of 35kV transmission line on the 22nd October 2018, AGL and NMG started working on documents to be submitted to municipalities for obtaining a construction permit from Shuakhevi and Khulo Municipalities. The Annex to the LALRP for the condemned house located in the buffer zone between towers 112 and 113 has been prepared and submitted to lenders E&S team for approval. There may be route change in Furtio village. AGL will develop Addendum to LALRP and undertake archaeological screening prior to commencing construction activities. All documentation and compliances related to HSE checklists will be taken up with supervision by AGL once work re-commences

3. Compliance evaluation: Was the Company in material compliance with (i) environmental and social (E&S) requirements of the Lenders (ADB, EBRD and IFC), including the "Environmental and Social Action Plan" (Schedule 12 (Form of Action Plan) of the CTA), (ii) environmental, health and safety regulations, standards, and permits of the host country? If No, please summarize the non-compliance status and corrective actions that were taken or being taken.

Adjaristsqali Georgia LLC (AGL) continues operating with the construction phase Environmental and Social Management System (ESMS) and applicable E&S plans are being followed. The following actions have been implemented to make company be compliant with national and lenders requirements:

Shuakhevi HPP compliance with Georgian Environmental Legislation, ESIA requirements and other project documents are regularly monitored within the project through AGL compliance registry, permit management system and by the Environmental Supervision Agency (ESA) of the Ministry of Environmental Protection of Georgia through various inspections. No non-compliances or violation of Georgian legislation were found during the reporting period.

Project Environmental Permit conditions are being discharged regularly including ongoing monitoring. Geological, hydrological and biodiversity reports have been regularly shared with the Ministry of Environment. Due to rehabilitation works, review of all environmental permits of works were carried out in August 2018 to identify gaps and/or renewal requirements. All the work permits were valid for the reporting period, some of them will be expired in spring 2019 and AGE were instructed to update several permits for spring 2019

As for compliance with the Lenders Requirements, Environmental and Social Monitoring by ARUP was conducted in November 2018. Several actions were identified by Lenders’ consultant team to be addressed immediately and to avoid non-compliance. Following priority actions were identified:

1. Make SDA 3a safe and prevent recurrence 2. Contain/prevent discharge of cement wastewater into environment 3. Improve the management of tunnel wastewater 4. Stabilise exposed SDA and river bank slopes and temporary spoil/topsoil storage areas ready for winter

AGL has address all urgent actions identified by ARUP within several days after the audit. In particular,

1. The section of the SDA 3A top has been vacated and no parking of vehicles is being allowed. Part of this spoils has been rearranged so as to redeposit it at the base of the spoil thus making the area less vulnerable to slide. Vehicle approach has been restricted near the lower slopes of SDA 3A area. Damaged water channel is under repairs to allow direct flow towards Sediment Tank. 2. On SDA 5 the volume of containment tanks has been increased. Accumulated silt has been removed & tanks cleaned; AGL instructed Contractor to purchase Coagulant material immediately to allow more effective silt removal. 3. To improve management of tunnel wastewater hay-filter has been deposit with mesh on both sides; Silt cleaning frequency increased as per location specific need. 4. To stabilize exposed SDAs and river bank slopes and temporary spoil/topsoil storage areas all slopes at SDA closer to the edge of the river / embankments were temporarily supported with sandbag garland protection.

Final audit report with further findings by ARUP will be provided in Feb 2019.

AGL has strengthened HSE team by having two persons working on safety supported by AGE HSE team and MML inspectors. HSE practices and procedures have been followed to mitigate safety risks incurred from working in tunnels. Safety awareness trainings both for workers and communities have been implemented permanently.

As for social, construction stage SEP has been followed, AGL maintains information officers at Didachara and Khichauri PICs and one CLO in Skhalta. Communication and coordination between AGL and AGE’s CLOs have been improved significantly, joint field visits and monitoring facilitated timely solution of concerns. Separate Grievance Logs have been kept for workers and communities. AGL uses several communication tools for disseminating project related information.

Livelihood restoration activities have been delivered as per DLRP, LALRP and 35kV Transmission Line LALRP Addendum. For the reporting period, AGL undertakes mainly monitoring as all projects and activities envisioned by these plans have been completed.

AGL developed Annex to the LALRP for relocation of households living in the house affected by the construction of the 35kV transmission line according to Lenders requirements. AGL instructed NMG to renew and update construction permits both for Khulo and Shuakhevi for the 35kV transmission line according to the national legislation. If re-routing in Furtio village is required AGL will undertake archaeological screening and prepare Addendum to the LALRP as required by Lenders.

4. Major environmental and social achievements: Please summarize notable E&S achievements of the Company during the reporting year (e.g. awards received, higher performance achieved or recognized, improved community relationship).

Environmental management system was restructured to reflect the return to tunnel rehabilitation stage. An environmental officer was contracted to increase site supervision. As a third party, ERM was engaged for CEMP and BAP quarterly audit.

Environmental NGOs involved in monitoring activities reported no damage to biodiversity.

As for social, active communication with key stakeholder groups such as project-affected communities, including women, local authorities, workers, local media, etc. continues. Public Information Centers (PICs) kept playing a positive role in active engagement with all stakeholder groups. Didachara PIC along with the Khichauri main camp is operational, and AGL still maintains CLO in Skhalta valley. AGL collaborates closely with AGE social team, and together a number of meetings have been held in communities where active rehabilitation works are progressing. Multiple joint meetings, informational sessions, and field visits were conducted throughout the reporting period. Recognizing the need to ensure public access and stakeholder participation, AGL continues publishing an informational page in the regional Newspaper Ajara on a monthly basis regarding ongoing project activities.

The Project operated according to the construction stage labour management policies. AGL and AGE social teams conducted regular monthly meetings with the AGE workers in all working camps to ensure monitoring of labour management issues and working conditions. In addition to this, AGL continued monitoring of employment opportunities for local community members.

In order to create additional employment, mitigate traffic impact and ensure safety for residents AGL implemented the Street Marshals Employment Program in Akhaldaba and Chanchkhalo communities. Ninety local villagers have been employed as street marshals under the supervision of the Project’s safety and social teams.

5. Major challenges and issues for the Company: Please summarize major environmental and social challenges of the Company faced with (e.g. major incidents, spills, fire, explosion or unplanned releases, failure of emissions or effluent treatment, legal / administrative notice of violation, penalties, complaints, litigation, protest, negative media attention, chance finds of cultural heritage, labor unrest or disputes, local community and civil society concerns) and actions taken during the reporting year.

Main Environmental challenges during the reporting period are:

• Rehabilitation of SDAs, camp and other construction sites; • Water discharge from tunnel and sediment ponds management;

Below is the contractor’s tentative updated timetable for restoration activities for the reporting period:

Table 1 Tentative timetable for SDA restoration activities

3 - 123,000 122,000 Closed Completed May - 2019 May - 2019 Didachara

3A - 63,500 39,700 Still in use Nov - 2019 Mar-2020 May 2020 Diakonidze adit Diakonidze 4 - 342,500 340,500 Still in use Nov - 2019 Mar-2020 May 2020 Vashlovani adit Vashlovani 4A Zamleti 17,250 15,540 Closed, Sep-17 Sep-17 Jan-19 Plantation - @ replanted and 300 Samplings handed over. 5 88,750 89,000 Still in use Dec - 2019 Mar-2020 May 2020 Concrete Batching Plant & 35 KV Trans. Line Storage Area 6 240,000 213,500 Closed and April - 2019 March - 2019 May - 2019 Concrete re-engineered Protection & Drainage channel rerouting in progress. 7 51,000 50,300 Closed May - 2019 July - 2019 Aug- 2019 Works partially and completed and re-engineered final As built drawings ready for submission. 7A 172,300 170,500 Closed Dec-18 May - 2019 July - 2019 Concrete partially and Protection & re-engineered Drainage channel rerouting in progress. 23 210,000 72,000 Closed Mar-19 May-19 Jun-19 Skhalta Outlet partially and re-engineered

Location / Permitted Current Status Planned Planned Planned SDA N Storage Volume (See drop timeframe for timeframe timeframe Comments Volume Used (m³) downs) completing re- for for (m³) engineering completing handover according to the replanting approved SDA plans) Camp & Closed but not Plan needs to be 2 Months Jul-19 Camp not yet Batching yet re- developed & after plan dismantled by Plant - engineered approved by approval AGE. Camp Chirukhi according to GoG. Gamma is structures the approved working on the dismantling in SDA plans plan. progress. Draft Plan reviewed comments shared with Gamma. Camp Site Still in use Plan needs to be 2 Months March - Camp will be - Skhalta developed & after plan 2020 required during approved by approval Skhalta PH GoG. Gamma is Commissioning working on plan. and then will Draft Plan be dismantled reviewed by Dec 2019 comments shared with Gamma. Camp Site Still in use Due to works in 2 Months May - 2020 Camp will be - Skhalta - after plan required during Didachara Didachara approval Tunnel Section & Commissioning Diakonidze - and then will Vashlovani area be dismantled Camp is re- by Dec - -2019 opened. Gamma will be contracted for developing plan. Storage Still in use Due to works in 2 Months May - 2020 Storage area Site - Shuakhevi - after plan will be required Akhaldaba Didachara approval during Tunnel Section storage Commissioning area is re- and then will opened. be dismantled Gamma will be by Dec - -2019 contracted for developing plan. Camp Site Still in use May-19 Aug-19 Nov-19 Camp will be - Kichauri required during Tunnel Commissioning and then will be dismantled by March – 2020

Spoil disposal areas A1, 3, 4A, 6, 7 and 7A are being engineered in line with the approved SDA plans. SDA’s 3A, 4, 5, and 23 will be further utilized during the tunnel repair works. MML and Gamma will review the engineered SDA's for compliance with the approved plans.

The project is back to re-construction activities camps and construction sites became operational again. Only Chirukhistqali camp has been closed, Camp Demolishment and Restoration Plan was developed by Gamma which is under review by AGL and AGE.

The project is back to re-construction activities camps and construction sites became operational again.

AGL participates in the Problem-solving initiative to the complaint from the residents of the Rabati District of the Makhalakidzeebi village in Shuakhevi Municipality. From the beginning of the

10 mediation process, AGL reiterated its position to the complainant that the Company did not see any connection between the Company activities and the issues raised by the community members. Multiple governmental and independent inspections and studies undertaken from 2014 and 2016 support the Company’s position. At the same time, the Company reaffirmed that AGL would assist the local governmental agencies in exploring a solution for this issue. Further, the Company envisages that some support programmmes can be considered within the framework of its CSR programs during the operation phase.

Limited employment options during tunnel rehabilitation working activities remained one of the major challenges for the Project. For the reporting period, the project employed more than 250 locals.

One of the challenges that remains unsolved is the issue of disputable land parcels in Tsablana village. There were 17 such cases although one case has been resolved. AGL, jointly with the Contractor, NMG is working proactively to mediate negotiations among land users. In general, delay in construction of the 35kV transmission line remains a concern for the Company. Since last reporting period a minimum progress has been made. However, AGL has requested NMG to renew construction permit for Khulo and Shuakhevi and resume construction activities.

As physical relocation of households from the condemned building in the buffer zone for the 35kV transmission line project is the first precedent in the Project, AGL has to implement requirements under the Annex to the LALRP with cautiously and carefully.

Change Management

The route of the 35kV transmission line in Furtio village, Shuakhevi will be changed as AGL and one landowner did not agree on land compensation price offered by the Company. Re-alignment of 1 km line will result in relocating 6 towers. New Metal Georgia has been requested to prepare screening application for the Ministry of Environment and Agriculture of Georgia, based on which the Ministry will make decision whether the new line should go through the EIA procedure or not. In order to be compliant with Lenders standards AGL will prepare Addendum to the LALRP and undertake archeological screening even though the latest may not be required by the GoG.

6. Key Project implementation data relevant to E&S performance evaluation: 6.1. Start of construction date: 26 July 2013 6.2. Start of commercial operation date: 178MW Shuakhevi Project received Generation license on 21 September 2017. (subsequently suspended due to HRT collapses) 6.3. Gross electricity generation capacity (MW): 187 MW (Shuakhevi HPP – 178 MW, Skhalta HPP – 9 MW) 6.4. Net electricity generation capacity (MW): will be updated on COD 6.5. Gross Electricity generated during the reporting year (GWh/year): Nil 6.6. Net Electricity generated during the reporting year (GWh/year) – Nil Total, a portion exported to Turkey - NA, a portion delivered to Georgia: NA 6.7. Plant capacity factor (%) – Gross Electricity generated (GWh/year) / Gross electricity generation capacity MW x 8,760 hour/year: NA 6.8. Number of workers as of December 31 of the reporting year 6.8.1. Number of direct employees of AGL: 49 in total disaggregated as 9 expatriates and 40 Georgian. 6.8.2. Contractors: Civil Works Contractor: AGE Batumi Number of employees: 522 of which 272 employees are expat (mainly Turkish workers) and 250 are Georgian workers Electro-Mechanical Works Contractor: GE Alstom / No employees 11

Owners’ Engineer: Mott Macdonald Ltd UK Number of employees: 23 of which 11 are expat employees and 12 Georgian employees

7. Compliance with IFC Performance Standards / EBRD Performance Requirements / ADB Safeguard Policy Statement (SPS):

7.1. PS1/PR1/SPS – Assessment and Management of Environmental and Social Risks and Impacts:

AGL developed Environmental and Social Management System (ESMS) for operational phase for managing environmental and social risks and impacts in a structured way. As the project is back to construction phase construction phase E&S procedures are applied where relevant.

Re-alignment of 1km transmission line in Furtio village will require development of additional documents according to national and international standards. International Supplementary Environmental and Social Assessment (SESA) may be updated to reflect changes, risks and impacts of the new route although the same is not envisaged on account of the small length of the change. Besides, construction activities will be implemented according to the CEMPs where relevant.

Apart from Furtio alignment, SESA will also reflect information about the physical relocation of the households from the condemned house in the buffer zone. The relocation does not anticipate to have a significant negative impact on households, on the contrary the affected households (2 AHs while 1 AH lives in Batumi) will have a safe living place with better communal conditions, besides their livelihood will not be affected as they will still retain access to social infrastructure they are used to.

As for livelihood restoration activities, all LRP projects have been completed, AGL permanently undertakes monitoring of the effectiveness of the projects via filed meetings, focus group discussion, face-to-face interviews. As mentioned in previous reports more critical situation was observed with hazelnut projects as the majority of delivered tree saplings died due to inadequate care of the beneficiaries. AGL does not intend to provide additional seedlings to replace the loss but will discuss internally if additional support can be provided.

(a) E&S Assessment and Management System / Policy: Please provide an updated summary description of the environmental, health and safety (EHS) management system of the Company (organizational chart, budget, reporting lines, responsibilities, policies, procedures). Please attach the Company’s latest EHS and social policy statement. If the Company’s EHS management system was internationally certified (e.g. ISO 14001, OHSAS 18001), please attach a copy of the certification.

Environmental, health and safety (EHS) management system is in place. The HSE Management system is aimed to comply with ISO Standards. Contractors HSE works closely with AGL HSE and communicates all neat-miss incident/accidents to the AGL HSE who collates a master spreadsheet on HSE performance.

AGL HSE team comprises of 2 persons, one Georgian and one Turkish. Mott MacDonald does not have a separate HSE personnel but provide necessary supervision and direction with a view to achieving the required quality standards and safety requirements. AGE has dedicated skilled HSE teams who perform their tasks in accordance with the Risk Assessments and Method Statements. AGL jointly with the Contractor undertakes regular site inspections, AGE also reports to AGL and share all observations found at site.

One AGL employee (with support of environmental officer on site) is working full time on 12

Environmental Compliance and along with AGL and the Contractor’s HSE Team, they ensure that EIA and all permitting requirements for the project are being adhered to international standards. With the demand of AGL, AGE’s environmental team has been strengthened with additional environmental officer on site.

(b) Identification of Risks and Impacts: Based on the actual operation of the Company (including construction phase) during the reporting year, please provide a summary of the key risks and impacts that the Company was faced with and the actions taken.

As the Project commences works in the tunnels, and with particular emphasis on tunnel repairs, the HSE management of this work will be key. Much time is being dedicated to setting up all teams with experienced tunnel works, experienced supervision, and strict focus on the safety aspects of these works. With the repair activities gaining speed and expanding to many fronts, the Project is considering employment of an additional Safety Manager to supervise work.

As during construction, the environmental aspects of work in the tunnels will be managed by effective mitigation controls and as a result, no impacts were recorded in the environment as a result of project activities.

As the Project has not gone into operations phase, the Operations phase E&S processes have been developed but kept in abeyance. For example, although the methodology and infrastructure for ensuring, monitoring and reporting minimum stipulated environment flow is in place the same is not being implemented as the gates are fully open and all the water inflow in river is currently being released without any diversion.

(c) Organizational Capacity and Competency: Please provide a summary of the latest organizational structure of the Company (roles and responsibilities) in charge of EHS and social issues. Please provide a summary of training programs carried out including planned capacity building programs, if any.

As the project moved back to the construction phase, the company retained all key employees in order to ensure that all procedures are followed and Project operates in line with national and international requirements.

HSE team comprises of 2 persons supported by MML inspectors and AGE HSE team. As working in tunnels require regular supervision and strengthening of HSE performance, AGL redeployed some of its O&M team members for overseeing safety aspects after imparting them necessary training for the tunnel works.

AGL technical team is supported by Project Technical Director from UK, also Project Commercial Director has been hired to lead the negotiations with the insurance for settlement of the Insurance claim.

There are 2 dedicated personnel working on environmental issues: Environmental Compliance Manager and Environmental Officer at project site. The social team consists of a community information officers (CIOs), a stakeholder engagement specialist (SES), a CSR Manager and a Social Director.

Tunnel Repairs Org. Chart is provided below for reference.

Figure 2 Tunnel Repairs Phase Organizational Chart

Legal CEO CSR Environment HR *COO

Project Director Project Director (Technical) O & M CFO (Commercial) & Peter Pitts Insurance Lead Geotech Permits & Martin Lacey Experts Approvals Review 35Kv Xmission Deputy Project Director line Lenders (Technical) - Sanjay of Design Insurance Diakonidze Accounts Skhalta Audits Commissionin Testing Risk Agency

GE – Alstom Project AGE OE / AGL Project (Punch list Safety (2) Insurance MIS items) Schedul Claims AGL Site Senior (Services supervision from Marsh)

Tunnel inspectors at various faces of tl k * will be sourced from Tata Power closer to recommencement of Operations

(d) Emergency Preparedness and Response:

As the project resumed construction activities, the company and the contractor act according to the construction phase Emergency Preparedness and Response Plan.

For serious occurrences that could have a material adverse impact on the Project, AGL CEO & CFO will notify the Lender group as per the CTA to inform about the occurrence, measures taken and rectification action that will be adopted to redress loss and prevent recurrence with future activities or emergencies regarding affected communities.

(e) Monitoring and Review: If the Company publicly reported on overall E&S performance (e.g. sustainability report), please describe how it was done. Please also provide a summary of the Company's internal inspections and audits conducted to verify E&S performance compliance.

AGL has established internal monitoring procedures to measure the effectiveness of the programs and evaluate its performance against the management plans.

From social part, AGL shared the land, social and accounting report to ARUP on a monthly basis on social performance. The report outlines information about the latest status with the grievance procedure and data management, as well community engagement, labour issues, CSR activities, land acquisition and compensation measures. In addition to that AGL maintains comprehensive database of persons/households affected by the land acquisition, also employment data, and regularly updates CSR and LRP project database.

As for internal inspections and audits, AGL social team members monitor the implemented social and livelihood restoration projects through meetings with beneficiaries and field visits in order to verify the progress against the desired outcome. AGL social team members produced minutes of meetings and all original written consultation correspondence were retained as evidence of the process and outcomes. Concerning the grievances, AGL stakeholder engagement specialist complied, analyzed and reported regularly information gathered from CLOs. In addition to this, stakeholder engagement specialist logged each grievance and gave an identification number, as well followed through by recording details and timing for their resolution and closing out.

AGL has put in a significant effort for internal monitoring of the HSE performance and compliance with the project HSE Plans. Risk Assessment and Method Statements (RAMS) has been followed. AGL periodically conducts a week long HSE inspection process that is inclusive of senior managers from AGE, AGL and MML. These joint inspections are conducted on a day as well as night shifts and then the reports are issued in a formal written note to both the Contractors for action, where required. These HSE inspection reports are also shared with the Lender’s independent E&S advisor, ARUP.

AGL conducted a review of the HSE performance data from July to December 2018 and noted a decrease in the number of Lost Time Incidents during tunnel repair work but a noticeable increase was observed for road traffic accident and hence it is classified as a major cause for injury.

Some major incidents with high potential consequences happened during the reporting period, such as: 1) AGE’s Grouting Worker fell from the height, and related work accident resulted in an injury to the right leg of the person at the Vashlovani Tunnel. The injured person was given a 5-day medical leave; 2) One of the AGE’s Hilux cars had an accident in Keda. A driver after completing his duty was returning to the camp with difficult driving conditions of heavy rains, and bad visibility. At one of the turns on the road, he noticed some people on the road and in to the process of avoiding them, he swerved the car to the right side but ended up crashing against a tree. Nobody was injured, only the vehicle was damaged; 3) On Akhaldaba tunnel access road, a cabin of the dumper truck carrying road material to the tunnel caught fire. The vehicle was going uphill when the fire started, when the engine stopped suddenly. Although the driver used the foot brake and the hand brake, the vehicle slid backward from the ramp and fell off the slope. Fortunately, no one was injured.

All events were investigated thoroughly by the contractors and corrective and preventative actions have been taken as per findings.

HSE observation system have been developed to ensure a systematic and adequate periodic reporting of daily walkthrough at site. All observations are kept centrally by the AGL HSE Department and data analysis is reported within the organization on a monthly basis. Data analysis for July- December 2018 are enclosed below.

Near miss awareness training was conducted to tunnel repair teams to create systematic reporting on near miss event. All project members including senior staffs were trained by AGL and AGE HSE teams.

Specific training modules as per scope of the works were developed after completion of the training and tunnel authorization card is issued by the contractor HSE Department to prevent entry of untrained and unauthorized persons into the tunnels. Please refer to Annexure 2 AGE 2018 HSE Training Program.

Top HSE issues (such as electrical safety, road traffic, PPE usage, confined space) were discussed with all project teams during weekly and monthly coordination meetings to take robust actions on HSE risks.

Risk Assessments as a part of RAMS was provided by the Contractor and also AGL and MML required the Contractor to conduct Job Safety Analysis (JSA) prior to specific activity. JSA is also shared with the workers during toolbox talks/start-up.

Regular environmental site inspections are carried out with AGE, MML & AGL representatives. The findings are recorded and issued to the respective contractor. Corrective actions are agreed on site and timescales for closure decided upon.

External monitoring is provided by ARUP for environmental, safety and social matters while Lahmeyer provides the technical assessment on Lenders’ behalf. Both organizations report back to the Lenders and AGL for any required action items.

(f) Stakeholder Engagement:

For the reporting period, AGL continued to work effectively with the key stakeholder groups according to the guidelines from the construction phase SEP approved by lenders. In particular, AGL information and community officers engaged actively through their daily contacts with representatives of communities and by regular field visits in key communities that are located close to working areas. Informational meetings were held with the representatives of the local government in key communities such as village heads and representatives of the mayors’ offices. Simultaneously, AGL social team conducted information meetings regularly with community leaders, AGE Georgian and Turkish workers, including local women.

AGL Stakeholder Engagement Specialist and AGE Community Liaison Officer were the points of contact for grievances during the reporting period. AGL kept publishing an informational page in the regional Newspaper Ajara on a monthly basis, which outlined information with project implementation, as well as other relevant topics related to the rehabilitation works.

It is important to note that during the reporting period AGE social team members continued to work alongside AGL’s own social team and took a more active role in engaging with local communities and local government representatives.

7.2 PS2/PR2/ADB’s Social Protection Strategy 2001 – Labor and Working Conditions:

(a) Human Resources Policies and Procedures: If the Company received complaints through internal grievance mechanism for workers or through national regulatory agency/courts, please provide a summary of those, particularly about issues of labor union membership, non – discrimination, provision of mandated benefits including wages and medical and other social insurances, involuntary retrenchment, local employment and occupational health and safety.

For the reporting period, the project did not receive any grievance through national regulatory agency and courts concerning labour issues.

A worker’s grievance mechanism is in place. AGL stakeholder engagement specialist works closely with AGE community liaison officer to ensure timely response to workers’ grievances. Upon the commencement of reconstruction activities, AGE re-recruited local workforce, for the reporting

16 period project employees 272 Turkish and 250 Georgians. AGE local workers, as well 90 locals employed within AGL’s CSR programs. Information about the local’s recruitment perspectives was provided via informational meetings with communities and local authorities, which were organized by AGL and AGE social teams. Labour contracts were arranged for each employee with the duration of max 3 months. Along with Didachara camp, Skhalta working camp became operational again. Accommodation was provided both for Turkish and Georgian workers if needed. Decision about recruitment was made based on experience and required skills by AGE Batumi.

(b) Workers Organization: Please provide a summary of whether the Company complied with national law in allowing workers to form and join worker’s organizations without retaliation or discrimination. Please provide a summary of worker’s organizations with numbers in member workers relative to total employees.

Name(s) of the workers' organization(s): To date no organizations have been sought out by workers despite the fact that Labor Code of Georgia allows to do so.

AGL and AGE social and technical teams elaborated and implemented a Retrenchment Program for all workers employed in the project throughout 2017. After resuming rehabilitation works, the contractor company re-hired significant part of former workers for ongoing repair works. Retrenchment is terminated due to resumption of remobilization of workers.

(d) Grievance Mechanism:

The Workers Grievance Log-Book was in place by contractor. AGE CLO records the grievances for Georgian and Turkish workers according to the Labour Grievance Plan. Grievance mechanism is easily accessible for workers via complaint box at each camp. In addition to this, AGL and AGE social teams conduct regular informational meetings. During the rehabilitation working activities, AGL operates according to the construction stage labour management policies. From July to December 2018, AGE and AGL social teams registered officially five complaints. Main concerns raised by workers were related to food quality, short-term working contracts as well as additional working clothes for winter. Please, find below the table with detailed information on submitted grievances.

Table 2 Workers' grievance log

Grievance Type No of Actions taken Grievances Poor food quality 1 Didachara camp workers collectively complained about the quality of food and requested to prepare food at Didachara camp and not transport it from the Khichauri main camp. A meeting was organized with the Dortel Manager. As a result, food quality has been improved but food is still transported from Khichauri. Salary Reduction 1 Turkish workers complained about the reduction of salaries by 150-200 USD. AGL met AGE management who mentioned that the reduction of salaries was due to currency inflation in Turkey and this information had already been communicated to workers. Special working clothes 2 The first grievance was received in September followed by the similar grievance in November. AGL 17

Grievance Type No of Actions taken Grievances stakeholder engagement specialist and AGE community liaison officer discussed the issue with AGE management. All local workers received requested working clothes for winter. Contractual issues 1 AGL stakeholder engagement specialist and AGE community liaison officer discussed the problem with AGE management. In particular, some Georgian and Turkish workers did not receive copies of the employment contracts. The problem was solved within next working days by AGE. All complainants received copies.

All grievances were responded in a timely manner and AGE and AGL social teams followed to close all complaints.

(e) Child Labor / Forced Labor:

The Company is in compliance with the child and forced labour requirements of the performance standards. AGL social team monitors that the contractor and sub-contractor companies are compliant with the Child Labor Standards and the Child Labour laws of Georgia.

(f) Occupational Health and Safety (OHS):

The Project employed an average of 443 people between July to December 2018. Approx 60% are of Turkish Nationality and 40% Georgian Nationality. This figure includes all office and support personnel based at the camp areas and Batumi Offices.

From July to December 2018, the Project recorded 16 accidents and incidents including near misses. The majority of the events are low potential occurrences. One Lost Time Incident (LTI’s) was recorded during this period. These incidents resulted in 50 working hours lost in production time. injured person returned to work and resumed normal duties. (injured person from H1 completed his treatment and resumed duties November 2018, hence his Lost Time 730 working hours is recorded in H2) Please see graphs for Accident / Incident statistics in Annexure 2 Section A, B, C, D and Table 11 for events register.

All Lost Time Injuries (LTI’s) will continue to be subject to additional focus to ensure that AGL is preventing injury and managing absence effectively with appropriate health support in place for employees. During the period, AGL have continued to encourage their employees and contractors to make positive interventions and take action where there are unsafe acts or conditions observed.

The transfer tunnel and headrace tunnel are high risky areas where collapse repair works are carried out by the contactor. Necessary risk mitigations are in place to achieve project’s safety target. And also the contractor will be enforced to follow up HSE procedure, project’s specification and BS 6164 standards. AGL and MML will ensure that adequate supervision is provided during execution of the works and the contractor teams are capable to cope with this situation.

On the EM front the focus remains on work around energized equipment. Lock out tag out procedures are closely monitored as well as permit to work authorization so that relevant persons

are aware of the nature of work undertaken in respective areas and the work parties involved in execution.

The Environmental engineer’s responsibility in the OE team is monitoring environmental issues due to the construction efforts. Weekly inspections are carried-out jointly in a written format with the civil Contractor and corrective actions and preventive measures implemented.

Table 3 Occupational Health and Safety Performance (Construction Phase) during this semi-annual period

Number Item Target Employees Contractors Total – H2 2018 A: Fatalities: - 0 - B: Total Lost Time Accidents - 1 1 (including vehicular): C: Total number of lost workdays - 5*+73* 5*+73* resulting from incidents.

D: Total man-hours worked this 116,028 598,337 714,365 reporting period: E: Incidence during this reporting - 0.00010924 0.00010924 period: (Note: Incidence = total lost workdays / total hours worked) F: Lost Time Injury Frequency - 1.4 1.4 Rate (Number of lost time accidents x 1,000,000 hours / total man-hours worked = injuries per million hours worked) G: Lost Time Severity Rate (Total - 109.2 109.2 7.5 or less Lost workdays x 1,000,000 (construction hours / total man-hours worked = phase) lost workdays per million hours worked)

*5 Lost Days belongs H2 LTI

*73 Lost Days coming from H1 LTI

Table 4 Improvement Trend of Occupational Health and Safety Performance

Item 2014 2015 2016 2017 2018 A: Fatalities: 0 2 0 0 0 [Employers] [Contractors] [Total] B: Total Lost Time Accidents (including 14 7 14 6 3 vehicular):

[Employees] [Contractors] [Total]

C: Total number of lost workdays resulting 69 694 38 45 131 from incidents: [Employees] [Contractors] [Total] D: Total man-hours worked this reporting 2,367,795 4,045,80 5,079,27 1,952,527 1,229,807 period: 1 9 [Employees][Contractors] [Total] E: Incidence during this reporting period: 0 0.006 0.00000 0,000016 0.000106 784 52 F: Lost Time Frequency Rate (employers) 5.91 1.73 2.76 2.58 2.4 (Contractors) (Total) G: Lost Time Severity rate (employees) 29.14 171.53 7.48 23.04 106.5 (Contractors) (Total)

1 Please attach separate reports detailing the circumstances of each fatality. Also discuss how the company has provided benefits/assistance to the worker's family. 2 In capacity to work for at least one full workday beyond the day on which the accident or illness occurred. 3 Lost workdays are the number of workdays (consecutive or not) beyond the date of injury or onset of illness that the employee was away from work or limited to restricted work activity because of an occupational injury or illness.

(g) Workers Engaged by Third Parties: Please provide a summary of how the Company is managing and monitoring the performance of third party employees in relation to the requirements of the PSs / PRs.

Third parties such as subcontractors and consultants are subjected to weekly and monthly monitoring checks by AGL, MML and AGE management. Records, such as inspections and audit are maintained at the main camp. AGE (contractor) employ third party organizations for calibration services and testing or key site items such as lifting equipment and cranes. These third party employees or visitors are subjected to the same induction and supervision practices as full time Project employees on the Shuakhevi HEPP.

7.3 PS3/PR3/SR1 – Resource Efficiency and Pollution Prevention:

(a) Resource Efficiency – Greenhouse Gas (GHG) emissions avoidance: Please provide the Company’s estimate about the GHG emissions avoidance effect of the Project:

GHG emissions avoidance of the Project: Project is in the Construction Phase for the reporting period.

Table 5

Year Gross electricity Auxiliary Net electricity Grid emission GHG generation electricity generation factor (tonCO2 emissions (MWh / year) consumption (MWh / year) / MWh) avoidance (MWh / year) (tonCO2 / year) 20

A B C = A – B D E = C x D PDD for CDM Actual 2018 0 2,892,522 -2,892,522 0,396 -1145438.7

Table 6 Estimated CO2 Emissions from Mobile Sources (Gasoline Vehicles)

Total Total Gasoline Gasoline CO2 CO2 number of length of consumed vehicle emissions emissions vehicles distance (litre) (TJ - efficiency factor (tonCO2) travelled LHV) (litre / km) (kgCO2/TJ- (km) LHV) A B C D=B/A D=69300 E=BxD/1000

2014 2 400 30 69300 0,00225

0,075 2015 3 532 105 0,080 70850 0,00386 2016 3 86800 8680 0,1 69300 0,868 2017 3 54,000 5,400 0,1 69300 0,54 2018 Jan- 5 11287 1710 0,15 69300 0,256 Jun 2018 July- Dec 5 24548 3080 0,12 69300 0,386

Note: CO2 emissions factor (gasoline) 69300 kgCO2/TJ-LHV from 2006 IPCC Guidelines.

Table 7 Estimated CO2 Emissions from Mobile Sources (Diesel Vehicles)

Total CO2 Diesel consumed Diesel Total length of emissions CO2 vehicle number of distance factor emissions (TJ - efficiency vehicles travelled (litre) (kgCO2/TJ- (tonCO2) LHV) (litre / km) (km) LHV) A B C D=B/A D=74100 E=BxD/1000 2014 292 400 30 0,075 69300 0,00225 2015 294 1153988 873852 0,7572 74100 661,68 2016 340 6868600 4120187 0,6 74100 2472,1 2017 170 3778740 2553531 0,675 74100 1725,58 2018 Jan- 152 782365 560000 0,715 74100 400 Jun 21

2018 July- 71 477502 73227 0,153 74100 11,20 Dec

Note: C02 emissions factor (diesel 011) 74100 kgC02IT J-LHV from 2006 IPCC Guidelines.

Pollution Prevention - Waste: Please provide a summary of non-hazardous and hazardous waste generation and minimization activities using the table below. Please add a summary description of major recycling activities conducted.

Table 8 Non-hazardous and Hazardous Waste Minimization Activities

Item Non-hazardous waste Hazardous waste Generated Re- Disposed Recycling Generated Re- Disposed Recycling (ton) cycled (ton) ratio (%) (ton) cycled (ton) ratio (%) (ton) (ton) A B C=A-B D=B/A E F G=E-F H=F/E 2014 285 - 285 0% 13,71 13,71 - 100% June - Dec

2015 236,4 - 236,4 0% 27,30 27,30 - 100% Jan- June

2015 91,35 - 91,35 0% 20,94 20,94 - 100% July - Dec

2016 Jan – 374,06 - 374,06 0% 53,55 53,55 - 100% June

352,8 - 352,8 0% 62,8 62,8 - 100% 2016 July - Dec

279,6 - 279,6 0% 10,5 10,5 - 100% 2017 Jan – June

395,1 - 395,1 0% 10,5 10,5 - 100% 2017 Jul - Dec

2018 306,8 - 306,8 0% 7,4 7,4 - 100% Jan-Jun

2018 July-Dec 306,8 - 306,8 0% 2,2 2,2 - 100%

Please add a summary description of major recycling activities conducted.

Even if the contractors follow a suitable waste segregation system in the workplace and camp areas,

22 it does not affect the final output due to the general waste management system in the country. Our system comes in the form of color-coded waste bins. However, this waste is then taken to licensed refuse in Batumi where no such waste segregation of recyclable waste exists resulting in mixing of the waste categories. As for hazardous waste, based on new Georgian legislation, AGL has registered hazardous waste temporary storage area in the electronic system of the Ministry of Environment. From September 2018, transportation of hazardous waste is happening through the licensed company and electronic reporting to the Ministry of Environment.

At the powerhouse and dam area, wooden waste which came along with the river flow is given to locals. Apart from this no significant waste is generated.

Pollution control and prevention measures are implemented through the Project’s CEMP Sub-plan 004 - Spill Prevention and Chemicals Storage Plan. This plan is incorporated into the Contractor’s HSE Plan at site level and reviewed for compliance by the HSE inspection teams and AGL Environment officer on a weekly basis. In additional ERM CEMP compliance audit conducted in the middle of October identified several facts of pollution mainly tunnel water discharge in the river, insufficient sediment pond which was address by the Contractor. Mainly, a pond has been enlarged at the Skhalta-Didachara outlet area based on consultation with experts and straw bales have been installed, a new settlement pond has been constructed at Chanchkhalo adit. AGL has been pushing AGE to find more efficient way to address this problem.

7.4 PS4/PR4/SR1 – Community Health, Safety, and Security

(a) Implementation of key actions for community health and safety (dam safety):

Apart from informational meetings undertaken by AGL social, safety and technical teams with community members and local municipal representatives, after the commencement of rehabilitation works, AGL in close partnership with AGE and local government initiated Street Marshals Program for the local residents in Akhaldaba and Chanchkhalo communities in Shuakhevi municipality. The program was developed after multiple meetings with the local communities in order to meet safety standards in the Project-affected areas by traffic, minimize traffic impact (mud, dust), and as well create employment perspectives for local villagers. At this stage, 90 local villagers are employed as street marshals in both villages. In addition to this, 2 marshals have been hired by AGE near Diakonidzeebi Public School based on the request of the Diakonidzeebi community.

AGL extended the service of Marshutka drivers for transportation of villagers near Didachara area. Prior to recruiting drivers AGL HSE Manager conducted safety induction to drivers and visual inspection of vehicles. This mitigates the traffic movement and facilitates safe transportation of local residents.

AGL in consultation with the Shuakhevi Mayor and Adjara Road Department initiated part repairs of affected road section in Chanchkhalo by constructing supporting stone baskets and drainage channel. Part of the village road is also widened thus reducing the necessity to travel along the by- pass road through Gomarduli. The repairs were inspected by representatives of the Road Department during construction stage and further coordination for final inspection is scheduled in April 2019.

(b) Implementation of key actions for security personnel management: Please provide a summary of the planned key mitigation measures of the security staff about appropriate use of force where applicable toward workers and affected Communities.

During this reporting period, no use of force was needed, and no situations arose that required the 23 use of security personnel attention.

The security staff have direct supervision on site and are aware of their responsibilities through induction and refresher on the Security Code of Conduct Policy.

(c) Implementation of key actions to other incidents. Please provide summary of incidents recorded including date, scale of damage and injury, if any; authorities in charge of investigation / recording and media or community reactions, if any; action taken to respond to the incident; and any outstanding issues and proposed measures. Please provide any other health and safety events or out-reach activities including incidents that have caused damage to the environment or to human health, and/or attracted attention of outside parties (e.g., fire, explosion, chemical or oil spill, and pollution release).

AGE has provided refresher training to their employees who were involved in any unwanted occurrences. All new workers for tunnel repair works were inducted with appropriate tunnel safety training and these training sessions were organized by AGL and AGE HSE Manager.

Training sessions for Emergency Preparedness were also conducted for the reporting period and will continued in the future too.

7.5 PS5/PR5/SPS – Land Acquisition and Involuntary Resettlement: (a) Land Acquisition. Livelihood Restoration: Please provide a summary of the land acquisition and livelihood restoration, including implementation of the Land Acquisition and Livelihood Restoration Plan. Identify any gaps and the corresponding measures/corrective actions undertaken by the Company.

No progress has been made on land acquisition for the 35 kV transmission line for the reporting period.

Due to the re-routing of the 35kV transmission line in Furtio village, land acquisition and livelihood restoration activities will be commenced as soon as the Addendum to LALRP is prepared and approved by lenders. AGL will also undertake archaeological screening for the new route according to the lenders' requirements.

AGL discussed several alternatives to avoid resettlement from the condemned structure located in the Right of Way of the 35kV transmission line between towers 112 and 113. From the safety perspective, it was recommended to relocate people living in this house. A consultant company ACT prepared an Annex to the LALRP which was shared with lenders in October. AGL is revising the document based on the comments received from ARUP/Lenders in November.

According to the Report the house is occupied by three households, while one is the legal owner and the others do not have legal entitlements. All three households will be treated in an equal manner in terms of compensation. In addition to that, recognizing that large part of the households in the Project area live below the poverty line and depend on State pensions and allowances, 10% mark- up to the market price will be additionally paid to each household as vulnerability assistance. As the livelihood of the inhabitants will not be changed and also the resettlement will not affect the income of the households no additional livelihood restoration activities will be provided.

AGL will disclose the Report as soon as it is approved by Lenders.

(b) Please provide a summary of PS5/PR5/SPS related stakeholder engagement and outcomes.

AGL has a separate Grievance log for the 35kV transmission line project. All complaints are registered there and together with NMG responses/solutions are discussed. For the reporting period there have been only 2 grievances from Tsablana villagers requesting compensation for the 24 disputable land plots. Unless the issue is solved among the land users, arrangement of contract and money transfer will be put on hold.

7.6 PS6/PR5/SR1 – Biodiversity Conservation and Sustainable Management of Living Natural Resources

During the reporting period AGL was following construction phase Biodiversity Action Plan (BAP) and Construction Environmental Management Plans (CEMP) as tunnel rehabilitation works do not present new risks to biodiversity that are not managed through the existing plans. No activities were recorded for the35 kV transmission line project.

Biodiversity Monitoring

According to BAP the following biodiversity monitoring activities have been undertaken:

- Fish monitoring on 15 locations in August and October; - Large mammals survey - in August, October - Floristic monitoring, including invasive species – September and October. Twenty-one sites are being monitoring for the spread of alien invasive species. Out of these only 9 sites have scattered individuals and 2 SDA sites have extensive species of the alien invasive species Ragweed, Ambrosia artemisiifolia and Black Locust, Robinia pseudoacacia. They were mechanically removed by Contractor staff. - Macroinverbrates survey – November

No decrease of species was revealed. Reports were shared with ERM for further review and comments.

In addition to biodiversity report review, AGL has been commissioned ERM to review and report on progress of actions taken to implement those aspects of the construction phase BAP applicable to the present phase of the project. Several days’ site visits were conducted by ERM specialist in October between 22nd and 26th. Following sites were visited by specialist: All SDAs at various stages of rehabilitation; The Didachara tunnel exit; The Skhalta camp and dam; The Chirukhisqali camp (disbanded) and weir (including fish pass); Compensation site for the red-listed species at Vashlovani and the Khichauri camp.

ERM also conducted a meeting with NGOs responsible for construction phase flora and fauna monitoring. This followed a detailed review of monitoring reports provided till date and review of all reports and plans earlier provided.

Based on site visit and interviews with NGOs, ERM found Implementation of BAP actions satisfactory. Though several actions are behind the schedule, in particular, habitat restoration of several SDAs and Chirukhi camp, and compensatory tree planting. There are several objective reasons for the delay, mainly lack of land available in Adjara region for tree planting, topsoil issue and challenging situation in the project resulted from the tunnel collapse.

Compensatory Tree Planting

Tree plantation maintenance activities and monitoring of survivals were conducted by the local NGO “Mta-bari” in Autumn 2018 in Vashlovani (3.5 ha) and Didachara areas (o.7 ha). The mentioned organization which has been involved in surveys and monitoring activities since 2013, also ERM assessed growth and survival rates as good (around 85%). Trees were replaced with new saplings on SDA 4, where the survival rate was very poor and was considered as a pilot project for tree 25 planting on SDAs.

Actions related to on-site and off-site compensatory tree planting taking into consideration national permitting and BAP obligations is a very complex issue. AGL has tried several ways to address these issue, for example identifying new land plots for tree planting with the help of Gamma consulting, using Batumi Botanical Garden to provide red listed tree species and etc. At the end AGL set up following plan/concept to comply with tree planting requirement:

• Firstly, AGL will finalize the compensatory Agreement with the Ministry of Environment and Adjara Forestry Agency which aims to provide compensation for the damage to biodiversity resulted by removing Red Listed trees during the implementation of Shuakhvi scheme. AGL will pay around 250 000 GEL and Forestry Agency will ensure planting minimum 8 800 red- listed trees by on forestry lands, also other non-red listed species (Pinus Eldarica, Acer Campestre and Georgian Oak) to recover other degrading forestry areas. Forestry Agency will report to AGL on the implementation of the agreement and AGL will be auditing them periodically. • Secondly, AGL will identify the land plots owned by AGL but not used for construction activities and use them for tree planting to meet BAP requirement (mixed local species) • Thirdly, after completion of reinstatement of construction areas, a suitable land plot will be identified (depend on the availability of enough topsoil and location) to conduct compensatory tree planting and meet BAP requirements (mixed local species).

Fish stocking obligation

AGL has developed a Fish Stoking Plan to comply with permitting requirements. The plan aims to convince the Ministry of Environment that AGL will better rent already existing, a successful fish farm in Keda Municipality (Adjaristqali river basin) for reproduction of native trout, rather than to establish its own fish farm. The Keda fish farm has an incubation department, pools for larvae, organized water supply and wastewater system. There are five experienced employees working at the far, and AGL will contract them. The plan was submitted to the Ministry of Environment and AGL is awaiting a response. Plans were reviewed by ARUP as well.

Third party auditing

ERM conducted site visit in October 2018 for auditing compliance with CEMP and BAP. Relevant audit report and CAP was provided to AGL to address comments and recommendation.

(b) Ecological flow management:

Though AGL has in place main document for managing environmental flow “Low flow Mitigation Strategy” (LFMS) and all required instruments for the monitoring, including fish passes are in place with functions to deliver EF entirely using a fully automates system, AGL is not implementing LFMS as water is not diverted or stored in reservoirs and all of the flow is being released in the river downstream.

AGL continued hydrological monitoring through gauging stations downstream of dams. Information from gauging station on water discharge and water level are submitted to the Ministry of Environment on a quarterly basis.

7.7 PR10/SPS/ADB’s Public Communications Policy 2011 – Stakeholder Engagement (a) Implementation status of key actions:

Following resumption of tunnel repair activities AGL is implementing construction phase Stakeholder Engagement Plan both for Shuakhevi power project and SEP for the 35 kV transmission line.

Specifically, for the reporting period:

• Public Information Centers (PIC) at Khichauri and Didachara camps have been functioning, AGL still maintains Community Information Officer in Skhalta. • Informational meetings are in place on a daily and weekly basis with all stakeholder groups (local authorities, affected villages, workers, media etc.). • AGL keeps publishing an informational page in the regional Newspaper Ajara which provides the Project news, updates and information to local communities on a monthly basis; • Grievances in the Community Grievance Log-Book are registered (separate logs for the Shuakhevi scheme and 35kV transmission line) • The Workers Grievance Log-Book is in place by contractor • AGL operates according to the construction stage labour management policies.

For the reporting period 148 local residents visited AGL public information centers. In particular, 75 at Didachara PIC and 73 at Khichauri main camp. Average 12 persons per month.

Below is a communication timeline for the reporting period:

Meetings with various groups of stakeholders are ongoing. Below is a communication timeline:

Table 9 Information Disclosure and Communication Procedures

Stakeholders Communication Issues Frequency Tools Government officials Meeting Ongoing issues Project Weekly Letter update / status Printed material Community concerns

Workers Meeting Lay Off, Labour Monthly Letter Grievances, Phone calls employment Community members including Meeting Ongoing issues Weekly community heads, elder people, Focus group teacher also vulnerable groups Letter such as women, female-headed Presentation household members, socially Printed material disadvantaged, disabled persons Field visits

Project Affected People Meeting LRP projects Monthly Focus group Land Printed material Media Media representatives Meeting Project update Monthly Interview When Article needed Press-release

Media coverage

The Shuakhevi project still remains mainly under the coverage of local media, though there have been several news stories prepared by the central media as well. Compared to previous months, frequency of media coverage of the Shuakhevi project has decreased.

Below are Charts 1 and 2 showing the media coverage statistics.

Chart 1 Statistics of media coverage of the Shuakhevi project

AGL in Media

32% 48%

15%

Internet Press Television Radio

Chart 2 Evaluation of Media Coverage

MEDIA COVERAGE ASSESSMENT 90% 8% 1% 0%

POSITIVE NEGATIVE NEUTRAL CRITICAL

Apart from traditional media, AGL also monitors appearance of AGL in social media via its contractor company IPM Researches.

For the reporting period there were 13 appearances only on Facebook, out of which 6 are negative, 4 – neutral and 3 - positive. 306 people reacted on different posts which means that they not only read posts but also expressed their emotions regarding the posts.

In order to identify what are the mostly used information channels by local communities and also to find out which communication tools are more effective AGL conducted media survey in July-August. The Respondents were selected on a random basis from affected as well as non-affected villages. Totally 118 people were interviewed both women and men of various age groups. The multiple choice questionnaire was developed which included 15 questions that targeted all members of communities.

Out of 118 respondents interviewed, 63 (53%) were men and 55 (47%) - women of various age groups.

Survey results are presented below briefly:

- Respondents consider traditional media as their main source of news, although the role of AGL’s information officers has been praised as well; - All age groups use social media; even though social media is an important element of an overall communications but is not yet in a position to replace traditional communications channels in the valley; - According to respondents Facebook is the most commonly used and the most effective social media platform; - Respondents prefer and trust more the central media outlets, compared to the local media; - According to the survey newspaper/magazines are not much read in the valley and TV serves as the main source of information.

(b) Information Disclosure:

AGL re-designed and re-structured the Company’s website (www.agl.com.ge ) which serves one of the way for disclosing project related information and public documents. A responsive and mobile- friendly website provides updated information and easy navigation. Based on ARUP/Lenders visit in November AGL started track usage and monitor statistics of website visitors. As AGL started tracking website from December 2018 only one month data is given below:

- There have been 877 unique visitors and 1,904 visits. - Top 5 countries list includes: China (492), United States (149), Georgia (56), Russia (38) and India (18). - Top 5 visited pages are: Home (911), About (113), Contact (83), Project (80) and Sustainability (70).

Apart from the website AGL uses other information disclosure and communication tools, such as:

- Public Information Centers in Khichauri and Didachara Camp, where AGL Community Liaison Officers communicate project related information and respond to locals queries regularly, together with the AGE CLO they also conduct regular meetings with workers and suppliers;

- AGL developed leaflets of Frequently Asked Questions (FAQs) and disseminated in affected communities; FAQ is also uploaded on the Company’s website;

- AGL undertakes monthly monitoring of appearance of AGL in traditional as well as social media;

- AGL continues cooperation with the regional newspaper “Adjara” and publishes informational page on a monthly basis. Newspaper is distributed in entire Adjara highland, AGL additionally purchases 100 copies and disseminates them in affected communities via social officers and mini bus drivers; Further to this, AGL social team has been permanently sharing information on social, land, environmental and technical issues among the local community leaders and representatives of the mayor’s office.

AGL stakeholder engagement specialist and AGE community liaison officer compiled, analyzed and reported the information gathered from PIC officers, prepared responses to grievances and ensured they were delivered to the complainant in a timely manner.

In overall, grievances during the reporting period were categorized based on validity and risk level by the AGL and AGE social team. Social team members together with AGL and AGE safety and technical departments worked closely to investigate the grievance and decide whether it is Project related or whether a relevant authority outside the Project is able to address it appropriately.

The Chart below summarizes the type and number of grievances received.

Table 10 Grievance registry from July-December 2018

Grievance title No of Actions taken complaints Impact on houses 9 For those complaints which were related to recent tunnel rehabilitation activities AGL/AGE social teams together with technical team undertook field visits, documented appropriately which would be verified after completion of tunnel repairing works. Compensation of the damage would be decided based on the verification results. For complaints which were related to earlier blasting activities (2014-2016), AGL provided responses based on the joint inspection reports. All these complaints have been closed in a timely manner. Land acquisition and 6 Most of the complaints were related to limited compensation / land access to pasture lands due to ongoing access rehabilitation works. AGL/AGE solved several quarries by arranging a path or providing farmers with needed equipment for shifting hay. All these complaints have been closed in a timely manner. Impact on spring waters 4 AGL registered the complaints from the villages Chanckhalo, Akhaldaba, Okruashvilebi, Diakonidzeebi. AGL within its CSR Programs provided alternative water sources for locals. For the time being, no household is left without accessing to safe, drinking water. Erosion and landslide 2 Both complainants were from Didachara processes community. AGL and AGE technical teams inspected the area and met with the complainants. It was pointed out that the company does not link any landslide activation processes to the conducted construction works but the Project team initiated building of a drainage system within its CSR projects as a part of remedial working activities on this matter.

Community safety 2 Akhaldaba (Shuakhevi) and Diakonidzeebi concerns (Khulo) community submitted joint grievances on behalf of the community members. The main complaint was on traffic impact in these communities. After multiple meetings with the local community members, AGL in close partnership with AGE and local government initiated Street Marshals Employment Program for the local residents not only in these communities, but also in Chanchkhalo village. 35kV T-Line Project 2 Both complains related to disputable land plots among the community members. AGL together with the contractor NMG undertook meetings to explain AGL’s position on this matter. In 30

Grievance title No of Actions taken complaints particular, until issue is solved among the land users, arrangement of contract and money transfer will be put on hold. Various 8 Minor grievances were related to queries such as: arranging a bus station, or compensation for the damage cow-shed. All complaints have been responded and closed appropriately. Total 33

Makhalakidzebi Community Complaint - Lender’s Independent Accountability Mechanisms

AGL continued to participate in the Problem-solving initiative to the complaint from the residents of the Rabati District of the Makhalakidzeebi village in Shuakhevi Municipality. From summer 2018, Project Complaint Mechanism (PCM) from EBRD led the problem-solving process assisted by local consultants representing IFC and ADB Independent Accountability Mechanisms respectively. From the beginning of the mediation process, AGL reiterated its position to the complainant that the Company did not see any connection between the Company activities and the issues raised by the community members. Multiple governmental and independent inspections and studies undertaken from 2014 and 2016 support the Company’s position. The Company took a firm stand during the joint workshop organized by IAM’s mediation team on December 7, 2018, at the main camp in Khichauri. Along with AGL, the community members from Rabati settlement of Makhalakidzeebi village and the local mayor’s office representatives participated in the workshop. The Company reaffirmed that AGL would assist the local governmental agencies in exploring a solution for this issue. However, it was pointed out, that AGL does intend to pay any monetary compensation for addressing this problem. The Company intends to implement its CSR Programs and engagement initiatives for focusf communities during the operations phase.

As mentioned in previous reports, several grievances have progressed through the court hearings. AGL has appealed the Supreme Court of Georgia to abolish the decision of the Kutaisi Appeal Court on fruit tree compensation. The Supreme Court’s decision is still in progress.

Other court hearings, such as a claimant from Vashlovani claiming 5,000GEL compensation and the Roads Department of Georgia demanding 7mln GEL from the company to undertake Batumi- Akhatsikhe road damaged section for repairing are still in process.

(d) Corporate sustainability activities:

For the reporting period AGL reduced its community investment profile and implemented CSR projects at a minimum level. A short list of CSR projects developed by AGL during the reporting period is the following:

- Students scholarship is still ongoing and 15 students continue receiving tuition fees; - Alpine Botanic Garden is developing gradually; - 3 mini-buses project which serves as a traffic mitigation measure for local residents is still progressing; - Street Marshals Employment Project created additional employment for locals as well as ensure community traffic safety; - Didachara drainage system: The purpose of the project was to channel the ground waters in controlled manner and this way minimize the impact of flooding by safely carrying the water. The design of the project was developed by AGL engineers, local mayor’s office of Khulo municipality was also involved in terms of providing heavy machinery to local workers. 4 villagers were employed 31 during construction activities, AGL engineers were supervising the works. 40 households will benefit from the new system. - Water supply projects in Diakonidzeebi (16 households benefited) and Gurta villages; - AGL started awareness raising and informational meetings with high school children of the affected communities. In December meetings were held in Didachara and Akhaldaba Public Schools. The meeting topic was Compost which is used in organic farming, how to make Compost and the importance of using it.

In the following months AGL within the framework of the awareness raising activities plans to continue meetings with the school children on different topics.

Annexure 1: HSE Performance Indicators 2013,2014,2015,2016, 2017, 2018

Section A: Accident Frequency Rate – Man-hours by Year

Section B: Total Recordable Injury (TRI = LTI+MTC+RWC) – Man-hours by month in 2018

180,000 Manhours - TRI by 2018 3.00

160,000 2.50 140,000

120,000 2.00

100,000 1.50 80,000

60,000 1.00

40,000 0.50 20,000

0 0.00

TRI

Section C: Injury vs Non-Injury % by Year

Injury vs Non-Injury % by year

31%

71% 74% 77% 74% 76%

69%

29% 26% 23% 26% 24%

2013 2014 2015 Injury%2016 2017 2018

Section D: Accident – Incident Classification by % in 2018

Accident-Incident by %

LTI, 44, 13% MTC, 0, 0% NM, 130, 38% FAC, 44, 13%

RTA, 83, 24% MD, 42, 12%

Table 11 Health and Safety Accident – Incident Register for the Period July-December 2018

Table 12: HSE Training Program

Shuakhevi HPP Environmental and Social Action Plan (ESAP) Construction Phase

No Action Source of Implementation Target For Current Status requirement schedule Successful Implementation / Reporting Requirement 1 Report to Lenders on the ADB SR1 EBRD - Semi-annually Submission of reports The latest Semi-Annual report status of each ESAP PR1 IFC PS1 throughout in format to be issued to the Lenders covers the requirement and construction until mutually agreed, period of July-December 2018. compliance with commissioning acceptance by PRs/PSs/SRs. - Annually during Lenders operation ESHS Reporting Requirement: - Completeness and adequacy of ESHS Report

2 Finalize development of ADB SR1 EBRD Prior to - Finalized ESHS with • AGL has in place compliance the ESHS Management PR1 IFC PS1 commencement all aspects included. registry which includes System to include (as Best Practice of construction - Lender approval of construction phase required by ESIA, vol. IV, works and then monitoring program environmental and social sec.4.2.2): prior to - Monitoring of aspects; - Register of commercial environmental • Construction phase environmental and social operation management monitoring schedule has aspects (including design been re-arranged and is - Register of change management) used to comply with the requirements and and mitigation as per construction phase conditions in legislation, AGL ESHS. environmental obligations; consents, permits, etc. Report to Lenders: • Operational ESMS has been - Schedule of monitoring - Status of ESHS finalized; program, including Management System • Tracker of operational E&S required and development commitments were recommended surveys / - Metrics of key developed. However, as the inspections/audits (EHS performance Project has moved back to Monitoring Schedule) indicators as set construction currently these Shuakhevi HPP Environmental and Social Action Plan (ESAP) Construction Phase

No Action Source of Implementation Target For Current Status requirement schedule Successful Implementation / Reporting Requirement - Development of down in AGL ESHS tracker is not being used; Environmental - Summary of audit • Operational management Improvement Plan results of AGL ESHS plans: through development of: - implementation BAP, Low Flow Mitigation E&S Management and Strategy, Sediment Monitoring procedures Management, Solid Waste - Environmental Operating Management, Emergency procedures Preparedness and Response - Preparation of action Plans are completed; lists and responsibilities • Draft of key performance - Environmental Operating indicators for operational procedures phase is developed and - Preparation of action requires further lists and responsibilities improvement. - Development of training • Organizational structure for materials and key tunnel repairs is in place - Design Change including the geotechnical Management procedure experts, Operations and Maintenance Engineers, who were recruited and trained for O&M phase.

3 Acquire and comply with Georgian law Prior to beginning - Permits & • AGL has in place a tracker of all required permits and ADB SR1 EBRD any activities authorizations Environmental Permits, which authorizations PR1 IFC PS1 that require received includes information about permits or - Reports permits/authorizations to be authorizations submitted to obtained. AGL Environmental authorities as Compliance Manager is required monitoring implementation of Report to Lenders: - Env. Permit requirement to Shuakhevi HPP Environmental and Social Action Plan (ESAP) Construction Phase

No Action Source of Implementation Target For Current Status requirement schedule Successful Implementation / Reporting Requirement Compliance status ensure compliance. Moreover, - Report immediately AGL together with MML any formal (Owner’s Engineer) is enforcement actions conducting regular monitoring of for non - compliance contractors’ permits registry. • AGL is in full compliance with statuary requirement during reporting period. • Required reports were submitted to the Ministry of Environment: quarterly hydrological and geodynamic risk monitoring reports in October and December 2018. , 6 months’ biodiversity report in December 2018. 4 Implement ESMP and all ADB SR1 EBRD Throughout - ESMP and all plans Noise, dust and water discharge are associated plans PR1 IFC PS1 construction and implemented being monitored as per the ESMP Best practice operation - ESHS impacts and CEMP. AGL started monthly avoided, minimized, monitoring of tunnel water mitigated discharge from December 2018 or compensated independently from Contractor. Report to Lenders: Results has been sent for lab - Highlights of analysis. implementation, including major deviances

5 Use best efforts to ADB SR1 Throughout - Transmission line No progress made since the last ensure ESIA on Batumi- EBRD PR1 development of ESIA meets reporting period. Akhaltsikhe transmission IFC PS1 ESIA and international Shuakhevi HPP Environmental and Social Action Plan (ESAP) Construction Phase

No Action Source of Implementation Target For Current Status requirement schedule Successful Implementation / Reporting Requirement line is completed construction/ standards in accordance with operation of line - Construction and international best operation in practice and that Accordance required mitigation with measures are fully agreed mitigation implemented. Report to Lenders: - Status of transmission line ESIA and approval process - Summary of construction and operation

6 Further develop OHS ADB SR1 EBRD Prior to - OHS plan further MML developed method statements plan to be specific to PR2 IFC PS 2 construction developed, adopted, for tunnel repair activities to Adjaristsqali project(s) Best Practice and implemented address the elevated H&S risks and ensure that the - Minimum lost time during these works. Specific HSE procedures and HSE incidents and procedure for tunnel repair activities manuals referred within fatalities has been developed by the it are an integral part of - Monitoring of Contractor with reviews from AGE health safety and environmental and and MML. environmental social management management on site and mitigation as Observations for negative and per AGL ESHS positive findings are recorded and Monitoring Schedule statistics are circulated within the Report to Lenders: organization. - Status of updating of OHS plan Lost injuries and near-miss Shuakhevi HPP Environmental and Social Action Plan (ESAP) Construction Phase

No Action Source of Implementation Target For Current Status requirement schedule Successful Implementation / Reporting Requirement - Outcome of OHS occurrences are recorded in monitoring as per accordance with the Contractor’s ESHS Monitoring and AGL’s HSE Plans and Schedule. elaborated in monthly reports as - Summary of OHS and when they occur. issues, including incident and/or The monthly report contains, fatalities summaries, causation and trend Enforcement analysis into negative site activities. statistics, status of training, etc. Report Monthly assessments are also to cover AGL and made on camp / accommodation contractor arrangements as part of the ESMP workforces along with possible effects of noise - Report to Lenders and dust on local communities immediately in case directly or indirectly affected by the of major accidents Project.

7 Implement Labor ADB SR1 Throughout - Plan implemented, Construction Labour Policies and Grievance Plan (2012), EBRD PR2 construction and mechanism made Procedures have been followed. including grievance IFC PS 2 operation available. Workers’ grievances have been mechanism made - Timely resolution of registered in the AGE Workers available to all AGL and all grievances Grievance Log-Book. AGE contractor workers Report to Lenders: Community Liaison Officer and AGL - Outcome of labor Stakeholder Engagement Specialist grievance are primary contact points of Turkish monitoring as per and Georgian Workers Public ESHS Monitoring Information Center (PIC) operated in Schedule Didachara working camp to monitor - Summary of grievance procedure and response grievances and to workers’ concerns in a timely Shuakhevi HPP Environmental and Social Action Plan (ESAP) Construction Phase

No Action Source of Implementation Target For Current Status requirement schedule Successful Implementation / Reporting Requirement resolutions manner. For the reporting period, AGE Batumi registered 5 grievances related to food quality and improving working conditions. All grievances have been studied and responded in time.

8 Review Spoil Georgian law Prior to spoil - Site specific spoil Spoil Management Plans were Management Plan to ADB SR1 EBRD generation management plans developed and approved by the ensure: PR3 IFC PS3 developed / Ministry of Environment in 2016. - Plan is consistent with Best Practice approved by AGL During reporting period, the SDAs ESIA and project design, - Spoil managed being engineered are being including estimated spoil according to plan reviewed by MML and Gamma for quantity - Monitoring of compliance with the approval plans. - Specific method environmental Engineering deviation of SDAs from statements and risk management and approved plans were noticed. assessments are mitigation as per Hence, contractor was instructed to completed for each AGL ESHS update drawings within the plans as spoil disposal site Monitoring Schedule “as built” and obtain approval from - Clarity on potential Report to Lenders: the Ministry of Environment. land acquisition - Status of site specific Updated plans were prepared by - Site specific subsidiary spoil management the Contractor and is under review plans to cover plans by MML. management of each - Outcome of spoil individual site during fill monitoring as per and subsequent site EHS reinstatement Monitoring Schedule - Designs sufficient to prevent erosion due to specified flooding events Shuakhevi HPP Environmental and Social Action Plan (ESAP) Construction Phase

No Action Source of Implementation Target For Current Status requirement schedule Successful Implementation / Reporting Requirement

9 Complete all necessary Georgian law Prior to - Surveys, reviews, An archaeological survey will be additional surveys, ADB SR1/SR2 commencement consultations undertaken in Furtio village due to reviews and EBRD PR3 IFC of construction completed 35kV transmission line re- consultations identified PS3 Best - ESMP modified as alignment. in the ESIA and project Practice needed permit approval Report to Lenders: conditions. Modify - Status of additional ESMP and associated surveys and impacts plans as needed to of outcomes on incorporate findings into ESMP environmental and social management.

10 Identify mitigation ADB SR1 EBRD Prior to - Mitigation N/A measures for concrete PR3 IFC PS3 commencement measures identified within CEMP11 and Best Practice of construction - ESMP modified as ensure appropriate needed management techniques Report to are employed through Lenders: the ESMP. - Updated CEMP12 - Outcome of CEMP12 implementation monitoring as per EHS Monitoring Schedule 11 Identify within CEMP09 Georgian law Prior to - Solutions identified As the Project is back to specific solutions with ADB SR1 EBRD commencement - CEMP09 modified construction AGL follows the regards to the need for PR3 IFC PS3 of construction Report to Lenders: - CEMP09 and the waste Shuakhevi HPP Environmental and Social Action Plan (ESAP) Construction Phase

No Action Source of Implementation Target For Current Status requirement schedule Successful Implementation / Reporting Requirement management of waste at Best Practice Updated CEMP09 management plan which was appropriately licensed - Status of site – developed and approved by the landfill or other sites. specific spoil waste Ministry of Environment in 2016. disposal site risk assessments and Specific risk assessments and a method statements hazardous waste management - Outcome of plan are in place as per CEMP 09. monitoring spoil AGE has contracted licensed management company to transport hazardous practices as per waste. EHS Monitoring Schedule

12 Identify and evaluate ADB SR1 Prior tocreation - Community H&S risk AGL continues geological monitoring risks to community EBRD PR1 of assessment for all at various construction sites. health and safety from IFC PS1 potential risks project stages construction and - Mitigation / To ensure health and safety of locals operation of the project, prevention measures AGL installed landslide online develop and implement developed and monitoring system in Chanchkhalo. commensurate implemented Data is being transferred to the preventive measures - ESMP monitoring server of Ministry of Environment for and plans to address and reporting interpretation. them. Report to Lenders: In order to mitigate traffic movement - Status of risk and facilitate safe transportation of identification and local residents AGL arranged mitigation, and service of mini buses which planning transports locals from villages to - Outcome of Khulo center and back. monitoring of H&S management of risks In addition to this AGL implemented to the community Street Marshals Employment Shuakhevi HPP Environmental and Social Action Plan (ESAP) Construction Phase

No Action Source of Implementation Target For Current Status requirement schedule Successful Implementation / Reporting Requirement as per Program to mitigate traffic risks in EHS Monitoring villages. Schedule The project operates according to the Emergency Prepare and Response Plan of the construction phase and Emergency Response Plan and Community Safety Management Plan approved by the Ministry of Environment in 2015. Commitments within these Plans are implemented by the Contractor. 13 Develop and enforce a ADB SR1 Prior to Code of Conduct The Code of Conduct, applicable for Code of Conduct for EBRD PR4 commencement developed and AGL employees (HR manual), is Security Personnel IFC PS1 Best of construction enforced being adhered as per the practice Report to Lenders: contractual terms for all security - Status of Code of personnel at the operations area. It Conduct is already implemented as per development contract. - Outcome of monitoring of effectiveness of Code of Conduct for Security Personnel as per EHS Schedule

14 Develop and enforce ADB SR1 Prior to - Code of Conduct Worker Code of Conduct is Worker Code of Conduct EBRD PR4 IFC commencement developed and displayed at the Khichauri, in accordance with the PS4 Best of the enforced Didachara and Skhalta working Worker Behaviour Practice construction Report to Lenders: camps. Shuakhevi HPP Environmental and Social Action Plan (ESAP) Construction Phase

No Action Source of Implementation Target For Current Status requirement schedule Successful Implementation / Reporting Requirement Guidelines phase - Status of Code of Conduct AGL Stakeholder Engagement Development – Specialist and AGE community Outcome of Liaison Officer are monitoring monitoring of implementation. AGL and AGE effectiveness of technical team is actively engaged in Worker Code of the process. Conduct as per ESHS Schedule AGL and AGE social teams carried out informational meetings with Turkish and Georgian workers on monthly bases. The minutes of the meetings are available.

15 Implement the LALRP, ADB SR2 Throughout land - LALRP implemented No progress has been made in including timely EBRD PR5 IFC acquisition - Up-to-date land land acquisition since the last disclosure of up-to-date PS5 process acquisition and reporting period. land acquisition and resettlement resettlement documentation documentation, available on AGL’s summary of LALRP website and locally. and information on Report to Lenders: progress (e.g. monthly - Status of acquisition Information - Summary of Letters, booklets, disclosures brochures, etc.)

16 Implement the BAP, Georgian law - Develop - BAP implemented • BAP actions are implemented including: ADB SR1 schedule: Prior - ESMP monitoring by AGL and contractor - developing and EBRD PR6 IFC to construction and reporting environmental team according Shuakhevi HPP Environmental and Social Action Plan (ESAP) Construction Phase

No Action Source of Implementation Target For Current Status requirement schedule Successful Implementation / Reporting Requirement implementing detailed PS4, 6 - Implement Report to Lenders: to the action plan. During the monitoring schedule for monitoring - Status of schedule reporting period monitoring of evaluation and reporting schedule: as development invasive species, small and of ecological impacts specified in BAP - Outcome of large mammals, birds, and recognizing findings throughout ecological monitoring amphibians and reptiles, fish of additional surveys during as per Monitoring and macroinverbrates were undertaken construction Schedule conducted by local NGOs. - monitoring flow and operation - Summary of Relevant reports were upstream and - Monitor flow: minimum flows submitted and reviewed by downstream of all dams throughout against requirements AGL and ERM. to verify required operation - Summary of minimum flows are met - Ecological ecological • In December 2018, six months’ - Ecological assessments: as assessments, report on Biodiversity assessments as per BAP including need for monitoring was sent to the performed to verify flows adjustments in Ministry of Environment as are adequate to minimum flows. required. preserve biodiversity, or

to redefine minimum flows • AGL continued hydrological monitoring through gauging stations downstream of dams. Information from gauging station on water discharge and water level are submitted to the Ministry of Environment on quarterly basis. Reports were submitted in October 2018 and December2018. •

17 Conduct additional ADB SR1/SR2 - Survey of area: - Surveys conducted Apart from archaeological survey Shuakhevi HPP Environmental and Social Action Plan (ESAP) Construction Phase

No Action Source of Implementation Target For Current Status requirement schedule Successful Implementation / Reporting Requirement surveys to determine EBRD PR8 IFC prior to - Consultations held information about graveyards will be presence of graveyards, PS8 disturbance of and actions agreed obtained from local communities. and if needed work with the area Report to Lenders: communities to minimize - Consultation - Summary of impacts with surveys and actions communities to taken (consultations, minimize impact: etc.) prior to - Outcome of disturbance of monitoring of graves graveyard protection as per EHS Monitoring Schedule

18 Update CEMP01, Georgian law Prior to - Updated Chance AGL will follow Chance Finds Chance Finds ADB SR1 construction Finds Procedure Procedure while conducting Procedure, to call for EBRD PR1 IFC Report to Lenders: archaeological screening for Furtio archaeologist to be on PS1 Status of ADB SR1 new route. site as needed to verify EBRD PR4 archaeological finds, - IFC PS1 updated provide advice to a Chance Finds nominated AGL Procedure representative, and liaise - Outcome of chance with relevant authorities. finds procedure implementation, monitored per EHS Monitoring Schedule

19 Implement Stakeholder ADB SR 1 Throughout - SEP implemented Stakeholder Engagement Plan Engagement Plan EBRD PR10 construction and Report to Lenders: developed for the construction IFC PS1 operation - Summary of stage applies for rehabilitation stakeholder phase. Shuakhevi HPP Environmental and Social Action Plan (ESAP) Construction Phase

No Action Source of Implementation Target For Current Status requirement schedule Successful Implementation / Reporting Requirement engagement Informational meetings are in place on daily and weekly basis with all stakeholder groups (local authorities, affected villages, workers, media etc.).

Public Information Center (PIC) is operating in Didachara working camp to cover Khulo municipality.

Company keeps community liaison officer in Skhalta as a member of social team and primary contact for the local communities in this area.

Khichauri main camp serves as another public information point for Shuakhevi municipality.

AGL and AGE social teams worked closely with the communities in which active rehabilitation work is ongoing with all stakeholder groups in both municipalities. Multiple joint meetings, informational sessions and field visits were conducted throughout the reporting period.

20 Evaluate and update ADB SR1 Evaluation - SEP evaluated and As construction activities have been Shuakhevi HPP Environmental and Social Action Plan (ESAP) Construction Phase

No Action Source of Implementation Target For Current Status requirement schedule Successful Implementation / Reporting Requirement SEP to improve/ refine EBRD PR10 and updated if needed resumed AGL operates according stakeholder list, update: annually to the construction phase SEP. during 21 Communication IFC PS1 construction, Report to Lenders: - - Public Information Centers in methods, media, etc. biennially Updated SEP Khichauri and Didachara Camp, thereafter where AGL Community Liaison Officers communicate project related information and respond to locals queries regularly, together with the AGE CLO they also conduct regular meetings with workers and suppliers; - AGL re-structured and re-designed the Company website; - AGL developed leaflets of Frequently Asked Questions (FAQs) and disseminated in affected communities; FAQ is also uploaded on the Company’s website; - AGL undertakes monthly monitoring of appearance of AGL in traditional as well as social media; - AGL continues cooperation with the regional newspaper “Adjara” and publishes informational page on a monthly basis. Newspaper is distributed in entire Adjara highland, AGL additionally purchases 100 copies and disseminates them in affected communities via social officers and mini bus drivers.

Shuakhevi HPP Environmental and Social Action Plan (ESAP) Construction Phase