INTER-AMERICAN DEVELOPMENT BANK CHILE ARICA I SOLAR PHOTOVOLTAIC POWER PROJECT (CH-L1079) Category B Project Environmental and Social Management Report (ESMR) SEPTEMBER 2014 1 TABLE OF CONTENTS I. INTRODUCTION II. PROJECT DESCRIPTION III. COMPLIANCE STATUS AND PROJECT STANDARDS IV. KEY ENVIRONMENTAL AND SOCIAL IMPACTS AND RISKS V. MANAGEMENT AND MONITORING OF ENVIRONMENTAL, SOCIAL, HEALTH AND SAFETY AND LABOR IMPACTS AND RISKS VI. REQUIREMENTS TO BE INCLUDED IN THE LEGAL AGREEMENTS APPENDIX Photos Environmental and Social Action Plan (ESAP) 2 I. INTRODUCTION A. Summary Table 1.1 Country: Chile Sector: Renewable Energy Name: Arica I Solar Photovoltaic Power Project Borrower: Arica Solar Generación 1 Limitada Sponsors: Sky Solar Group Project Cost: Approximately US$102.9 million IDB A-Loan: Up to US$25.7million China Fund Loan: Up to US$12.9 million Other Debt: Approximately US$33.4 million Environmental Category: B Project Team: Elizabeth Robberechts, Project Team Leader (SCF/INF); Rafael Matas (SCF/INF); Jan Weiss (SCF/SYN); Ulrike Aulestia Haarsager (SCF/PMU) and José Luis de la Bastida (VPS/ESG); Supervisor: Jean-Marc Aboussouan (Chief, SCF/INF) II. PROJECT DESCRIPTION A. Project Components 2.1 The Project consists of the construction, operation and maintenance of a 44.46 MW photovoltaic (PV) power plant and its associated facilities, which include the construction of an 18 kilometers (km), 66 kV transmission line (Línea de Alta Tensión 66 kV Pampa Dos Cruces) that will connect to the Parinacota Substation. The Parinacota substation is owned by Empresa de Transmisión Eléctrica (TRANSEMEL). The PV plant is located approximately 26 km east of the city of Arica and 5 km east of the village of San Miguel; and the transmission line is located approximately 4 km east of the city of Arica (Parinacota Substation) and runs within approximately 3 km north of the village of San Miguel at is closest point. The Project is located in the Community of Arica, Province of Arica in the XV Región de Arica y Parinacota, Chile (See Figure 1). The Project will occupy a total area of 176.2 hectares (ha), which includes 54 ha to be occupied by the transmission line, (see Figure 2). The estimated operational life of both the PV plant and transmission line is 35 years. 2.2 The Project encompasses the installation or construction of the following components: i) erection of 148,200 solar photovoltaic panels with a combined capacity of 44.46 MW; ii) construction of a substation in the PV plant site iii) several smaller underground electrical 3 cables within the Project area; iv) improvement and maintenance of 40 meters (m) access road (10 m wide) exiting the highway Ruta A-19 and within the solar facilities; v) construction of a two-meter high perimeter fence; vi) construction of support buildings, including offices and a temporary worker camp; and vii) construction of an 18 km transmission line with a variable right of way between 14 m and 16 m width to avoid overlapping existing right of ways, 66 kV, erection of approximately 101 electrical towers, to connect the solar facilities to the transmission line of the local operator company. Figure 1 - General Project Location 4 Figure 2 - Project Area Map 2.3 Several small buildings and other infrastructure will also be constructed in order to support activities during the construction process and throughout operations. These facilities include prefabricated or modular units to house the invertors, parking areas, showers and lockers for workers, on-site offices, equipment storage area, waste storage area, and hazardous waste storage areas. A large area will be dedicated to materials storage, such as solar panels, electrical cabling, and excavated soils. More precise information regarding various project components for the Project are detailed in Table 1 below, along with other project specific information. Table 1: Project Component Information Project Aspect Capacity 44,46 MW (148,200 panels) Energy Generation (annual) 100 GWh Total Area (Disturbed Area) 176.2 ha (to confirm) Construction of a 18 km transmission line to 66 kV Transmission Line connect the Parinacota substation Access Roads Needs some overhaul of 40 meters access road 5 Project Aspect from Ruta A-19 to the Project site. Hazardous waste storage Containers Construction: Maximum 294 m3/month – potable water Water Consumption (PV Solar Operation: Facilities) Maximum 39 m3/month – potable water Maximum 176 m3/month Construction: Maximum 105 m3/month – potable water Water Consumption (Transmission Operation: Line) Maximum 0 m3/month – potable water Maximum 0 m3/month Wastes (PV Solar Facilities) Construction – 2.94 ton/month Domestic wastes Operation – 0.39 ton/month Construction – 22.02 ton/month and 846 meters of Non-hazardous wastes wire/month Operation – no generation Construction – 0.159 ton/month Hazardous wastes Operation – 0.159 ton/month Wastes (Transmission Line) Construction – 1.05 ton/month Domestic wastes Operation – no generation Construction – 28.43 ton/month Non-hazardous wastes Operation – no generation Construction – no generation Hazardous wastes Operation – no generation Air Emissions (CO2 reduction) – 90,043 ton CO2/year Estimated Number of Workers for the PV Construction – 140 people/month (peak) Solar Facilities Operations – 7 average Number of Workers for the Construction – 50 people (peak) Transmission Line Operations – 0 (only occasionally 2 people) B. Environmental and Social Setting 2.4 The Project area, which encompasses 177 ha, including 55 ha to be occupied by the transmission line, lies approximately 26 km east of the city of Arica – Community of Arica, Arica Province, Arica y Parinacota Region –. The site of the solar plant is approximately 1,000 m above mean sea level (AMSL) and is located 40 m far from highway Ruta A-19. There is an access road from Ruta A-19 to the Project site (40 m); this road will need some overhaul to permit constant traffic, mainly during the operation phase. The site is located in an almost flat area in the Atacama Desert Region, which will need to be leveled partly. The route of the transmission line will occupy 14 m of right of 6 way in one segment and 16 m in two segments and will follow the route of existing transmissions lines. The terrain elevation of the transmission line starts at 1,000 m AMSL in the area of PV plant and ends at 300 m AMSL at the connection point in the Parinacota substation. 2.5 The Project area can be described as a natural desert habitat. Nonetheless, the site has already been impacted by previous human activities related to construction of transmission lines, primarily. Due to very little annual precipitation, the Project area does not support much life plant. No sensitive or protected plant species were identified in the Project area. Also due to the lack of rainfall and vegetation, no animal species surviving in the Project site have been identified. The site visit conducted during the Environmental and Social Due Diligence confirmed the lack of vegetation and wildlife on the site Project’s and the surrounding area. 2.6 No protected areas or priority zones for conservation were identified within the Project area. The closest protected area to the Project site is the Bien Nacional Protegido (Protected Area) Lote1 y Lote2 - Alto Poconchile, which is managed by the Ministerio de Bienes Nacionales and is located approximately 1.3 km northern of the PV plant on the Ruta A-143 between the 11.505 km and 15.543 km, Alto de Poconchile area. This protected area encompasses 1,197.09 hectares, and was created on July-23-2010 by the Ministerio de Bienes Nacionales to preserve, mainly, sensitive flora and fauna species such as the Eulidia Yarrelli –Picaflor de arica-, Liolaemus poconchilensis –Dragón de Poconchile and the Tillandsia Marconae –Clavel del Aire-. During the site visit was confirmed that the Project will not cause any impact on this protected area; additionally, the Project will implement a Reptile Rescue and Relocation Program, in case that any reptile specie found within the Project site during the construction and operational stages is relocated to the protected area. 2.7 During the site visit, it was confirmed the presence of one archeological monument on the PV plant site. This find is a small two-group stone alignment (3 meters long x 1.20 meters wide) with no associated archeological/cultural artifacts. According to the archeological base line, this alignment might have been a temporary shelter structure, and its chronological age has not been determined. Specifically, the Consejo de Monumentos Nacionales (CMN) has required isolating and protecting this area (restricted area) to prevent any damage on the structure, and no construction works will be performed on it. 2.8 In the case of the transmission line site, twenty seven (27) archeological finds have been recorded from which twenty five (25) finds are isolated groups of stones (60%) with a group diameter between 0.5 meters and 5 meters, small fragments of ceramic (16%) and few evidences of small stone tools (24%); one (1) find is a cattle drover path; and one (1) find belongs to an approximate 450 square meter-quarry of lithic material. Regarding the chronological age of these finds, 25% of them are Pre-Hispanic, 18% are historic (period after the Pre-Hispanic period) and 56% have not been determined. 2.9 In order to prevent any damage or disturbance on these finds located on both the PV plan and transmission line sites, the CMN has requested to implement a Management and Contingency Plan of Archeological Monuments, which will be managed by an archeologist during the construction and decommissioning stages. The company will 7 have to send monthly reports to the CMN to supervise preservation of these archeological elements and sites.