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The project was screened as B/0, requiring an environmental analysis of the proposed investment. The analysis was completed by an environmental consultant retained by AES, and included an environmental audit of Telasi’s facilities. The report and due diligence were reviewed and accepted by both EBRD and IFC environmental specialists. The EBRD carried out on-site environmental due diligence and conducted interviews with Telasi management.
The main issues identified during the environmental investigations relate to oil leaks from transformers, inadequate safety provisions and high accident risk at the distribution points. Most of the problems are the result of inadequate management in the past and are being addressed by AES Telasi.
Two samples of transformer oils were collected by the consultant and analysed for PCB-contamination. PCB concentrations in both samples were within the level accepted in the European Union and the United States. The sponsor agreed to carry out PCB tests of oil during planned transformer maintenance and repair.
An Environmental Action Plan (EAP) has been developed based on the Bank’s due diligence, as augmented by the consultant’s findings. The EAP has been discussed and agreed with AES Telasi management. Its implementation will bring the company’s operations in line with accepted international environmental and health and safety standards. The EAP includes the following actions:
- identification and prevention of all active leaks, spills and releases; development of a clean-up programme;
- evaluation of the extent of groundwater contamination in high-risk areas;
- improvement of materials storage;
- routine analysis of transformer oils for PCB contamination; procurement of PCB-free oil in the future;
- improvement of safety at the sites and provision of regular safety training for employees;
- improvement of waste management and general "housekeeping".
The project will also assist in introducing best industrial environmental and health and safety management practice to the Georgian electricity distribution industry.
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