Environment and Social Monitoring Report - Asian ...

 
CONTINUE READING
Environment and Social Monitoring Report - Asian ...
Environment and Social Monitoring Report

Semi-Annual Environment and Social Monitoring Report
Project Number: 47919 – 014
December 2020

Georgia: Adjaristsqali Hydropower Project

Prepared by Adjaristsqali Georgia LLC for Asian Development Bank

This environmental and social monitoring 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.

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 2020 –31 December 2020
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   E&S and HR KPIs                                         36

Annexure 3   Construction Phase Environmental and Social Action
             Plan (ESAP) as per Schedule 12 …………………….
Annexure 4   Action List

                                                                             2
SEMI-ANNUAL ENVIRONMENTAL AND MONITORING REPORT

1. Certification:
Georgia: Adjaristsqali Georgia LLC
Semi-Annual Environmental and Social Monitoring Report (SAMR) Reporting Period: July 01 –
December 31, 2020

Company and Project Information:
Company: Adjaristsqali Georgia LLC ("AGL" or "the Company")
Physical address of the Company: 129, Bagrationi Street
                                   Batumi - 6010
                                   Georgia

Company website: www.agl.com.ge

Project: The development, construction, operation and maintenance of the Shuakhevi and Skhalta
hydro-electric power plants with total electricity generation capacity of 187MW located on the
Adjaristsqali River in Georgia.

Authorised AGL representative who can be contacted by Lenders on the SAMR:

Name:          Rakesh Naik
Title:         Chief Executive Officer
Company:       Adjaristsqali Georgia LLC
Tel:           +995 577 691 968
Email:         rakesh.naik@agl.com.ge

Name: Anand Solanki
Title: Chief Financial Officer
Tel: +995 577 078 870
Email: anand.solanki@agl.com.ge

Certification of the SAMR by Adjaristsqali Georgia LLC

I certify that the data contained in this SAMR completely and accurately represents Adjaristsqali
Georgia LLC during this reporting period.

Anand Solanki
________________________________________________________________

Adjaristsqali Georgia LLC                                   Signature

                                                                                                    3
2. Summary:

For the reporting period, the Shuakhevi Hydropower Project (the Project) has been operating
smoothly and has generated about 29.62 Million units between 1st July 2020 and 31st December
2020, while the total generation as of 31st December 2020 since commencement of commissioning
trials in February 2020 being about 258.27 million Units. All tunnels have been in operations with
water transfer from Chirukhi and Skhalta being affected as envisaged under the overall project
scheme.

The balance works related with commissioning of 35 Kv line from Skhalta and Shaukhevi have also
been completed and the line was charged on 9th October 2020.

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

Civil Works: The civil works remaining in Skhalta, Didachara & Shuakhevi PH have been
completed. all SDAs are completed.

Tunneling Works: All finishing works in tunnel adits including grouting have been completed and
taken over by AGL. Draining arrangement at HPHRT was commissioned in September.

Didachara dam area: Repairs to LLO gate and structures were completed. Grouting works inside
leakage gallery and on downstream face of dam was completed by AGE.

Skhalta dam area: Skhalta bypass tunnel adit grouting works completed by AGE to attend the
leakages.

Skhalta Powerhouse: All balance preparatory works were completed with remote support from the
OEM team. Trial synchronization of all the 3 Units was also completed during October 2020. Further
load trials and commissioning activities would be taken up once adequate inflows are available. It is
expected that Skhalta HPP would be now commissioned in Q1 2021.

Diakonidze Weir: This scheme is under hold and may be taken up later at a suitable time.

35 kV Transmission Line: Subsequent to completion of all construction activities, and submission
of all documentation related to completion of 35 Kv line has been submitted to Shuakhevi & Khulo
Municipality in the prescribed formats, relevant approvals from GSE and inspections were
completed, and clearance was obtained for charging of the 35 Kv transmission line. The line was
successfully charged on 9th October and subsequently all associated equipment including outdoor
switchyard and transformer at Skhalta were also charged and taken in service. This has enabled
completion of all preparatory work for commissioning of Skhalta HPP which is expected in Q1 2021.

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.

The present report covers the period of the operational phase of the Shuakhevi hydropower plant.
Shuakhevi Hydropower Plant started commercial operation in March 2020. Persistent efforts were
made by the Project team to finalize and implement pre-commissioning preparedness and other
                                                                                                 4
outstanding commitments and ensured a smooth transfer to the new phase. AGL has developed the
Company’s overarching operations Environmental & Social Management System (ESMS). The
comments from ARUP have been received, the document is in the progress of finalization and will
be ready in the 2nd Q of 2021. In October 2020 AGL developed a draft Key Performance Indicators
(KPIs) linked to the management system objectives and shared it with ARUP/lenders for the
approval. The KPIs cover Environment, Social and Human Resources sections (Please see
Annexure 2). As for the OHS KPIs, they are established in the OHS Manual.

Project Environmental Permit conditions are being verified regularly including ongoing monitoring.
Quarterly Geological, hydrological and six-monthly biodiversity reports have been regularly shared
with the Ministry of Environmental Protection and Agriculture (MEPA). AGL has obtained only one
additional license for operational phase- Drinking Water Usage license for Skhalta HPP and received
approval for technical regulation on maximum permissible limits of discharge from WWTP at
Khichauri Camp.

As for restoration works, most of construction sites were closed and rehabilitated, except Didachara
and Khichauri camp areas. Biodiversity monitoring has been conducted as per Biodiversity Action
Plan and Low Flow Mitigation Strategies

The compliance of the Shuakhevi Hydropower Project with Georgian Environmental Legislation,
Environment and Social Impact Assessment (ESIA) requirements and other project documents are
regularly monitored through the AGL compliance registry, permit management system and by the
Environmental Supervision Agency (ESA) of the MEPA via various inspections. No inspections on
E&S issues by ESA have been carried out during the reporting period.

Project Environmental Permit conditions are being verified regularly including ongoing monitoring.
Geological, hydrological, biodiversity reports have been regularly shared with the MEPA. Biodiversity
monitoring has been conducted as per Biodiversity Action Plan and Low Flow Mitigation Strategies.
Closing out construction sites and SDAs were ongoing and most of the sites were closed per
recultivation plans approved by MEPA.

AGL updated HR Handbook which provides policies & guidelines for HR management and
monitoring procedures for all AGL employees. Employees’ Grievance Mechanism is in place.

The reporting period coincided with the second wave of COVID-19 pandemic in the country,
especially Ajara region showed an increasing trend. The Government closed schools and
universities, social gatherings were prohibited, and companies were urged to shift to distance mode
of working. AGL staff, mainly employees at the Batumi office were shifted to distance regime, only
essential E&M staff were traveling to site. AGL limited its physical interaction with communities,
however phone calls and assistance request letters from communities were still maintained and
responded in a timely manner.

AGL elaborated alternative communication tools to meet the requirements of COVID-19 restrictions.
Due to COVID-19 restrictions activities planned for the reporting period have been delayed, such as
third-part verification audit was shifted to 2021, however the consultant company has been identified
and contractual negotiations have been progressed.
AGL selected international consultant to undertake the Completion Audit which is expected to
commence in Q2 of 2021.

3. 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).

All environmental monitoring activities were conducted as per the environmental plans despite
COVID-19 restriction. During monitoring field experts followed All COVID related requirements.

As for the social achievements, AGL launched and successfully implemented business
                                                                                                   5
development projects in Chanchakhlo village, an obligation which were taken by the Company
under the Memorandum signed in 2019. Initially, locals protested to prepare business
development proposals and required the Company to provide business grants for free. Locals
demonstrated in front of the school yard in the village and refused to attend business proposal
writing trainings which AGL initiated to assist them in developing start-up projects. They even
approached the Shuakhevi Mayor and expressed dissatisfaction about this initiation. However,
AGL stood firmly on its position and through negotiations and communication reached agreement
with locals. 14 proposals were received from Chanchakhlo, and AGL financed 9 of them. The
second round of grant submission is planned in Q2 of 2021.

4. 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.

Minor changes in the original route of 35kV OTL and erection of towers on non-compensated land
triggered some complaints from the local inhabitants. AGL commissioned Expert 21 to undertake
land valuations but due to COVID-19 restrictions field visits and valuations have been delayed.
Valuation process will be finalized in Q1 of 2021.

5. Key Project implementation data relevant to E&S performance evaluation:
   5.1. Start of construction date: 26 July 2013
   5.2. Start of commercial operation date: 10th March 2020
   5.3. Gross electricity generation capacity (MW): 187 MW (Shuakhevi HPP – 178 MW,
        Skhalta HPP – 9 MW)
   5.4. Net electricity generation capacity (MW): 187 MW (Shuakhevi HPP – 178 MW, Skhalta
        HPP – 9 MW)
   5.5. Gross Electricity generated during the reporting year (GWh/year): 29.68 Gwh
   5.6. Net Electricity generated during the reporting year (GWh/year). Total, a portion
        exported to Turkey - NA, a portion delivered to Georgia: 29:41 Gwhr
   5.1. Plant capacity factor (%) – Gross Electricity generated (GWh/year) / Gross electricity
        generation capacity MW x 8,760 hour/year: 17.5% - year 2020 Plant capacity factor
   5.2. Number of AGL employees as of December 31 of the reporting year
       5.2.1. Number of direct employees of AGL: 66
       5.2.2. in total disaggregated as 5 expatriates and 61 Georgians, out of which 12 are
            women employees.
       5.2.3. Contractors:
    Civil Works Contractor: AGE Batumi
    Number of employees: 27 out of which 4 are Turkish and 23 Georgians (4 females and 19
            males).

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

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

 (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
                                                                                         6
(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.

AGL has finalized its Occupational Health Safety (OHS) Management Manual which is aligned to
the ISO 45001-20218. The manual solely focuses on health and safety at the workplace, as for the
environment it is managed by other applicable documents. The implementation and fulfillment of the
OHS system is the responsibility of all employees at various functional level, including contractors,
sub-contractors, visitors, etc.

AGL EHS management system comprises of 1 HSE Manager. Site audits and inspections are
carried out by HSE Manager. Due to pandemic restrictions AGL was unable to carry out tabletop
mock drill scheduled with the representatives of the Emergency Agency. It is planned to implement
as soon as the situation will stabilize.

AGL’s environmental team has full time Environmental Compliance Manager supported with
Environmental Consultant Company ERM and a Forestry Officer. During operational phase AGL
HSE officer and civil engineer are involved in environment related activities and site inspections to
support Environmental Compliance Manager. ERM is in charge of reviewing biodiversity reports
and mitigation measures (if any) provided by local experts, updating Statistical Trend Analysis yearly
and developing biodiversity monitoring repot once in a year.

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

For operations phase, E&S processes have been developed. The main focus has been made to
safely isolate electrical equipment, outages, and Lock out-Tag out procedures in place during the
transition period as this comprises the main activity in Operations. AGL Team continues to provide
specific training such as Electrical Safety, Fire Safety, Work at Height, First Aid, etc. to develop
Safety awareness for O&M Team.

AGL developed An Infection Disease Emergency Response Plan which was shared will all AGL
employees and also placed in AGL premises. Daily temperature control and checklists were in place.
Protective equipment (face masks, gloves, face shield, sanitizers) were provided at all locations.
Company vehicles, dormitories were disinfected twice per month. Health awareness meetings were
conducted regularly. Weekly medical checks were provided to all employees including Security
Police.

 (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.

AGL organization capacity has slightly changed for the operations phase. For the reporting period
there are 57 employees, where roles and responsibilities are split as follows:

- 31 engineers (civil, electric-mechanical, operations)
- 1 HSE Manager
- 1 Environmental Compliance Manager supported by Forest Officer at project sites.
- 1 PR Manager based in Tbilisi.

AGL’s Social Department continues its operations with the CSR Manager taking over the lead for
managing social issues and stakeholder engagement since March 2020. AGL retained two

                                                                                                    7
Community Liaison Officers (CLOs) working in Didachara and Skhalta valleys (Khulo municipality),
 a Stakeholder Engagement Specialist (SES) responsible for registering and managing grievances,
 as well as working with the stakeholders around the Shuakhevi HPP and Chirukhi weir in Shuakhevi
 municipality. Shuakhevi Powerhouse serves as the only ‘PIC’ during the operations phase.

 At operations phase there are no separate positions of CEO and COO rather than both positions
 have been combines and the CEO takes overall responsibility of the technical as well as ESHS
 management teams.
 As for the rest, positions are split among technical, administrative staff, financial team, legal, etc.
 The updated Organization Chart has been incorporated below:

Figure 1 Organizational Chart

           GE Alstom Contract Maint. Services during /H &sp. Maint
           Services Contract for echnicians & Helpers Shuakhevi Skhalta &
           Chirukhi
           Security P/H Didachara Skhalta Chirukhists ali
           Canteen Services Housekeeping
            ransport Services for Employees
           Legal Assistant
           Site Camp Manager
           Site Environmental Monitoring

                                                                            echnicians / Helpers

 Competency Building:
 Detailed training plan for HSE has been developed for all O & M staff including support functions
 and is being followed. Safety certification training program was conducted by Technical University
 of Georgia for all O & M staff. Training was conducted to develop awareness among staff towards
 Waste Management System. Firefighting drill & First aid training was conducted for the entire staff.

 (d) Emergency Preparedness and Response:

 AGL has developed Community Risk Assessment which is an integral part of the overarching
 Emergency Preparedness Plan. The Assessment lists all possible risks associated with the
 operations of the project, as well as indicates compliance with CDS guidelines.

                                                                                                      8
(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. On a monthly basis all AGL employees
prepare Monthly Review Report which is submitted to the management for review. Minutes of
Meetings (MoMs) prepared, and land acquisition, employment data, CSR/LRP database is being
regularly updated.

AGL has put in a significant effort for internal monitoring of the HSE performance and compliance
with the HSE Plans. PTW, JSA, Risk Assessment, and Toolbox Talks have been followed. AGL
periodically conducts an inspection process that is inclusive of senior managers from AGL.

For O&M stage AGL is continuing all HSE practices, such as Safety Rounds, HS Committee
Meetings, Inductions, Trainings, Mock dirills etc.

Some Near Miss Incidents that occurred during the reporting period are as below:

   1) On 16th of September 2020 a team from EMD was performing routine checks for the Fire
      detection system by operating individual sensors and confirming their health. They intended
      to test the control room fire detection sensors. As soon as they activated one sensor, the fire
      alarm in FACP as well as the control room Inergen gas system started sounding. A special
      training was provided to the O&M team regarding the specification of Fire Safety Equipment
      by EMD. AGL Electrical Foreman and Technician were instructed of the same, and also how
      to check smoke detectors in Control Room

   2) On 20th of October while walking at Shuakhevi PH GIS Room, AGL CEO slipped on the oily
      floor. The Oil was leaking from the Bridge Crane which is installed in the GIS room. luckily,
      he did not lose control and avoid from injury. As a preventive measure, the crane was parked
      in a safe area and it was electrically isolated. Also, the floor was cordoned.

   3) On 8th of December at Skhalta Security Office, there was a short circuit on the Electrical
      distribution panel which resulted in a small sparking in the Skhalta Security building. The
      issue was solved by the security police personal who immediately switched off the central
      MCB. As a preventive measure, EMD checked all cable connections and they have been
      installed safely.

All events were investigated thoroughly, and corrective and preventive actions have been taken as
per findings. The investigation reports were also circulated to AGL management for review and
comments for preventive actions.

HSE observation system has been developed to ensure a systematic and adequate periodic
reporting of safety 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 Jul-Dec 2020 are enclosed below.

To verify environmental performance, AGL engaged ERM to conduct audit in March 2020. However,
ERM team was not able to come to Georgia due to the COVID-19 restrictions. An audit was
conducted by ERM in November 2019 & AGL has closed all the audit observations.

For operational phase as part of ESMS system AGL is planning to contract ISO certified E&S audit
for yearly third-party verification. AGL is in process of finalizing scope of the audit as well as
contractual liabilities.

                                                                                                   9
(f) Stakeholder Engagement:

The Operations Phase Stakeholder Engagement Plan (SEP) was disclosed in February 2020.
During the virtual tour with lenders, it was agreed that AGL will update the Ops SEP incorporating
stakeholder engagement and consultation during pandemic in accordance with the EBRD and IFC
guidance documents.

Due to pandemic restrictions and mandatory requirements on social distancing, AGL tailored its
social interaction methods with communities. Phone calls and engagement through local actors,
such as CLOs and SES were the preferred method of communication by locals. During the reporting
period AGE’s human resource was significantly reduced.

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.

AGL ensures safe and healthy working conditions. Employees are provided with necessary personal
protective equipment for carry out work in safe manner. Canteen facility is provided for all staff. First
Aid facility is available at the Powerhouse and all work areas.

AGL revised HR Handbook and including recruitment policy. Employees Grievance Mechanism is
in place, all employees are aware of the Code of Conduct which is integral part of the Employment
Agreement.

 (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
even though Labor Code of Georgia allows to do so.

(c) Retrenchment:

Civil Contractor AGE largely demobilized in the reporting period. As of December 2020, 27 workers
were retained, 4 Turkish and 23 Georgians, out of this - 19 males and 4 females. Demobilization
process went according to the agreed plan. All workers received timely notifications about the
retrenchment.

                                                                                                      10
(d) Grievance Mechanism:

Employee Grievance Mechanism is in place, grievance boxes are installed in Batumi Office and
Shuakhevi powerhouse, grievance forms in English and Georgian have been shared with all
employees. Only one grievance was registered in the grievance log of employees which was related
to the food quality at the canteen. AGL HR and Admin Manager together with the Shuakhevi Admin
Manager immediately undertook survey of employees, conducted a meeting with the canteen owner
and delivered employees’ concern. A follow-up survey with employees showed that the quality was
significantly improved at the canteen.

(e) Child Labor / Forced Labor:

AGL’s legal teams review contracts against Georgian law which is aligned with the eight basic
International Labour Organization conventions) and has not identified any instances of Children
under 18 years being employed by the Project.

(f) Occupational Health and Safety (OHS):

The Company employed an average of 74 people between July-December 2020 more than 90%
were Georgian Nationals. This figure includes all office and support personnel based at the camp
areas and Batumi Offices, as well as workers hired by AGL for a short time repair works.

From July to December 2020, 3 Near Miss incidents were recorded. All the events are low potential
occurrences. No any Lost ime Incident L I’s was recorded only hree Near Misses were
recorded during this period.

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.

Table 1 Occupational Health and Safety Performance (Construction Phase) during this semi-annual period

                                                            Number
                     Item                                                                     Target
                                            Employees     Contractors     Total – H2
                                                                            2020
    A: Fatalities:                               0             0              0
    B: Total Lost Time Accidents                 0             0              0
    (including vehicular):

    C: Total number of lost workdays             0             0              0
    resulting from incidents.

    D: Total man-hours worked this            85320           5849          91169
    reporting period:
    E: Incidence during this reporting           0             0              0
    period:
    (Note: Incidence = total lost
    workdays / total hours worked)

                                                                                                         11
F: Lost Time Injury Frequency Rate                  0                      0                0
       (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  0                                       0                0            7.5 or less
       Lost workdays x 1,000,000                                                                                (construction phase)
       hours / total man-hours worked =
       lost workdays per million hours
       worked)

Table 2 Improvement Trend of Occupational Health and Safety Performance
Item                                            2014        2015         2016            2017            2018         2019       2020

 A: Fatalities:                                   0            2             0                0           0            0          0
 [Employers] [Contractors] [Total]

 B: Total Lost Time Accidents (including         14            7             14              6            3            6          0
 vehicular):
   [Employees] [Contractors] [Total]
 C: Total number of lost workdays resulting      69            694           38              45          131          170         0
 from incidents:
 [Employees] [Contractors] [Total]

 D: Total man-hours worked this reporting     2,367,795   4,045,801    5,079,279       1,952,527       1,229,807    2,123,028   411909
 period:
 [Employees][Contractors] [Total]
 E: Incidence during this reporting period:       0        0.006      0.00000784 0,000016          0.0001065       0.00008007     0
                                                                                                       2

 F: Lost Time Frequency Rate (employers)         5.91       1.73      2.76            2.58                2.4         2,82        0
 (Contractors) (Total)

 G: Lost Time Severity rate (employees)         29.14      171.53     7.48            23.04             106.5        80,07        0
 (Contractors) (Total)

(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 management. Records, such as inspections and audit are maintained at
respective offices.

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 was in the transition phase from Construction
Phase to Operations phase during the reporting period.

                                                                                                                                  12
Table 3
  Year              Gross electricity Auxiliary electricity Net electricity Grid emission          GHG emissions
                    generation (MWh / consumption (MWh / generation (MWh / factor (tonCO2 /        avoidance
                    year)             year)                 year)           MWh)                   (tonCO2 / year)

                    A                    B                      C=A–B             D                E=CxD
  PDD for CDM
  Actual
  2018              0                    2,892,522              -2,892,522        0,396            -1,145,438.7
  2019 Jan-June     0                    2,949,898              -2,949,898        0,396            -1,168,159.6
  2019 Jul-Dec      0
  2020 Jan-Jun      228800               1634                   227166            0.396            89957.73
  2020 Jul-Dec      29680                1650                   28030             0.396            11,099.88

Table 4 Estimated CO2 Emissions from Mobile Sources (Gasoline Vehicles)

                     Total Total length of Gasoline consumed      Gasoline      CO2 emissions   CO2 emissions
                    number      distance                            vehicle         factor        (tonCO2)
                       of    travelled (km) (litre) (TJ - LHV) efficiency (litre (kgCO2/TJ-
                    vehicles                                         / 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
                        5       11287           1710                     0,15         69300         0,256
        Jan-Jun
         2018
                        5       24548           3080                     0,12         69300         0,386
       July-Dec
     2019 Jan-Jun       5       29214           4090                     0,14         69300         0,572
     Jul-Dec 2019       5       22516           3782                     0,17         69300         0,672
       Jan - Jun
                        5        9216                                    0,16         69300         0,242
         2020

          Jul-Dec
                        8       44937        7762.94                  0.173           69300         1.34
           2020

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

Table 5 Estimated CO2 Emissions from Mobile Sources (Diesel Vehicles)

                                                                                  CO2 emissions
                    Total     Total length of Diesel consumed Diesel vehicle
                                                                                  factor        CO2 emissions
                    number of distance                        efficiency (litre
                                                        (TJ -                     (kgCO2/TJ-    (tonCO2)
                    vehicles travelled (km) (litre)           / km)
                                                        LHV)                      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      1725,5ი 8
     2018 Jan-Jun       152         782365        560000                  0,715        74100         400
     2018                71         477502        73227                   0,153        74100        11,20

                                                                                                                     13
July-Dec
     2019 Jan-Jun        153      2108188        1530540              0,725        74100          1109
     Jul-Dec 2019        148      2052246        1416036              0,689        74100           975
     Jan-Jun 2020        126      1747156         301970               0,17        74100          51,33
     June-Dec 2020

                           8          5009       5444.1               0.109        74100      0.592669669

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 6 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%

    2019
                 553,52           -           553,52         0%          9,6       9,6        -           100%
   Jan-Jun

                                                                                                                  14
2019
                 586,6       -       586,6       0%          15,7      15,7       -         100%
   Jul-Dec

    2020
                486,65       -      486,65       0%          0,9        0,9       -         100%
  Jan - Jun

     2020
                150,45              150,45       0%          0,2        0,2                 100%
   Jul - Dec

Please add a summary description of major recycling activities conducted.

During reporting period, there has been a significant decrease in the amount of domestic and
hazardous waste. Domestic waste is collected form Powerhouse and Kichauri camp area by the
municipality tracks.

Wastes are segregated based on type such as hazardous and non-hazardous waste. During
construction phase, AGL was ensuring transportation of hazardous waste by special contractor to
designated landfill in Batumi. For operational phase, as domestic waste has been reduced, local
municipalities are arranging transportation of waste from project areas.

As for Hazardous waste they are stored in special area, arranged as per requirement of Georgian
legislation and international practice. Contract has been concluded with licensed company
“SANI ARY” who is responsible for transportation and further treatment of hazardous waste.
Quantity of hazardous waste handed to contractor for recycling also information on transportation is
reported by AGL to the MEPA through official website.

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

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

AGL conducted safety information sessions prior to the commissioning of the 35kV OTL. Despite
the fact that operations of the 35kV OTL was covered during the Shuakhevi powerplant safety
briefing with communities in 2019-2020, AGL considered important to remind again about the risks
and precautionary measures to be undertaken by general public. As the commissioning coincided
with the lockdown in the country, virtual briefings were conducted with the villages heads and
representatives of Furtio, Nigazeuli, Nenia, Shuakevi (town), Okropilauri, dabadzveli as well as in
Khulo: Kinchauri, Tsablana, Tsabliani.

(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
use of security personnel attention.

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

                                                                                                   15
(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).

No incidents occurred during the reporting period

Training sessions for Emergency Preparedness were conducted and it will continue in the future.

During the reporting period COVID-19 pandemic was a major health issue. All the necessary
precautions were taken All the staff was sensitized about do’s and don’ts regarding C VID-19.
Rules and regulations were followed as laid down by GoG.

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.

Due to difficult geological landscape and unsuitable terrains for erecting towers, there were slight
changes in the approved route of the 35kV OTL and towers were shifted, this resulted in affecting
new land plots under the ROW. The scale of the impact is not significant. AGL is elaborating data
on the change which will be reflected in the Land Acquisition and Completion Audit. AGL has
resolved complaints received from locals whose land plots were affected by erection of towers and
line stringing. Expert 21 undertook valuation and assessment of some land plots, however due to
pandemic situation the valuation will continue once restrictions are lifted.

AGL fulfilled its obligations under the Addendum to the LALRP and in December delivered walnut
saplings (343) to 12 HHs who lost fruit bearing trees due to the project activities, as for agricultural
pesticides it will be delivered in H1 2021. HHs and village head were notified about the revised
timescale.

AGL finalized ToR for the Completion Audit and received no-objection from lenders. Audit proposals
were submitted by 2 constants, AGL planned to start the audit in October 2020, however due to
pandemic it was delayed and is planned to start in April-May 2021.

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

NMG erected several towers on non-compensated land. AGL learnt about this through the grievance
mechanism when some landowners/users submitted complaints requesting the land compensation.
AGL conducted site visits as well as undertook number of phone calls with complainants to study
the issue. The company will issue the document reflecting all changes in the project with respective
timeline for paying compensation. AGL has compensated all landowners affected by the original
design, however due to route changes some received compensation but had not lost any land, and
some did not receive compensation, though the land had been affected. AGL will commission land
officer and a valuator, Expert 21 to investigate such changes and based on the data studied intends
to compensate all HHs affected by such changes. As the majority of compensations have already
been paid and HHs had already been covered under the socio-economic survey, AGL will prepare
Land Acquisition and Completion Report. The report is expected to be ready in H2 of 2021.

                                                                                                     16
7.6 PS6/PR5/SR1 – Biodiversity Conservation and Sustainable Management of Living Natural
Resources

Biodiversity Monitoring

Surveys and monitoring required by the Biodiversity Action Plan (BAP) continues to be implemented,
monitoring results are shared with MEPA in accordance to the permit condition once in 6 months.
Last monitoring report was submitted in January 2021 and found satisfactory by the MEPA.

The following biodiversity monitoring activities have been undertaken:

   -   Fish monitoring on 15 locations in June and August 2020.
   -   Forest Restoration Monitoring - September 2020;
   -   River Macroinvertebrates- August and November 2020.
   -   Large mammals- August, October and December.
   -   Fish pass monitoring -14-19 October 2020.

Reports were shared with ERM for further review and comments if any.

Compensatory Tree Planting

With support of lenders consultant local botanists and ERM “No Net Loss” table was developed
which shows the type of habitat, area affected/lost, no net commitment of the project and
implementation status. According to the table around 30 ha is required to be planted to meet No Net
loss requirement. This figure includes impact of 35 kV OTL project as well.

In October 2021 around 8 ha area were planted in Nigazeuli, Shuakhevi municipality, 2 km away
from the project impacted area. The land is owned by the State and AGL has obtained no objection
letter before planting trees. Around 8 000 local species were planted in this area, dominated with
oak. AGL forest officer and botanist undertake regular visits to oversee the condition of the trees.

Totally for the reporting period 17.82 ha area is planted by AGL. The remaining 9, 5 ha will be planted
by LLP Wildlife Agency of the Ministry of Environmental Protection and Agriculture in Spring 2021.
According to contract between AGL and LLP Wildlife Agency (dated March 2020), tree planting
should have been carried out in September 2020, however due to COVID-19 restrictions it was
postponed to Spring 2021.

As for the rest 2.65 ha land plot which is pending to plant to achieve no net loss, AGL has identified
3 ha area in the Village Kidzinidzeebi, Shuakhevi municipality. AGL will apply to the National Property
Agency which is the owner of land plot to obtain no objection letter. Meanwhile, consultations were
conducted with locals who are willing to have walnut plantation in this area.

Tree plantation maintenance activities are regularly conducted by AGL in all 5 areas (villages
Tsablana, Nigazeuli, Jabnidzeebi, Iakobidzeebi and SDA 4). AGL forestry officer and botanist
oversee this activity. Local villagers are also hired to protect tree planting areas from cattle and
damages from the third parties.

Fish stocking obligation

Fish stocking activity is ongoing as per the approved plan. In March 2020 a contract was concluded
with the fish farm and the permit “to catch and remove” trout for the hatchery was obtained from the
MEPA. Fish catching activity was conducted in two stages in June and August 2020. As per fish

                                                                                                    17
stoking plan 180 reproductive trout was caught and transported to the hatchery. AGL has already
reported on the progress to the MEPA as required. Fish stocking will be done in March 2021.

Operational Biodiversity Action Plan

Operational Biodiversity Action (OBAP) Plan was developed by ERM. Information on Statistical
Trend Analysis of 2013-2019 was incorporated. AGL has received next round of comments from
lenders team, ERM has addressed comments and shared with ARUP.

Statistical Trend Analysis Report
ERM has carried out the Statistical Trend Analysis of construction phase biodiversity monitoring
data for birds, fish, endemic plants, herpetofauna, invertebrates, large mammals, macro-
invertebrates and small mammals of the period 2013-2019. The followings were the objectives of
the study:
     •   Review of all the reports submitted by NGO and check for any deviations in the year,
         locations and frequency of sampling
     •   Carry out initial trend analysis across all sampling locations across the years
     •   Undertake a separate analysis for control sites and impacted site and compare any trends
         between the control and impacted sites
     •   Use the trend analysis to assess residual impacts, at the end of the construction phase
         and suggest additional mitigation actions to address any residual impacts.

Based on the results there is no significant impact on biodiversity species. Though decline trend has
been noticed regarding the fish species and bird’s species. The report does not attribute the decline
to the project. However, the continuiation of the monitoring and minor mitigation measures have
been suggested. Impact was identified regarding floral critical habitat trigger species dwarf comfrey,
which was lost on the small area in Chirukhistqali. To achieve no net loss, AGL will re-plant 0.09 ha
area in September 2021 on Chirukhistqali camp area. In summer 2021 seeds of dwarf comfrey will
be gathered by the botanist.

Monitoring data suggest that the Project has not had a measurable adverse impact on the
abundance of the faunal critical habitat trigger species Caucasian salamander and that no mitigation
or compensation is required. Also, analysis indicates that the Project had not resulted in a decline in
otter activity. Though, ongoing monitoring is proposed and considered in accordance with good
international practice

Ecological flow management:

AGL discloses the e-flow monitoring reports on a monthly basis on AGL website. Besides, AGL
continued hydrological monitoring through gauging stations downstream of dams. Information from
gauging station on water discharge and ecological flow are submitted to the MEPA on a quarterly
basis.

AGL is looking for the options to install real-time e-flow monitoring camera. Monitoring cameras
were purchased and are in the process installation.

Restoration of SDAs and Camp areas

All SDAs are closed, and recultivation has been completed by AGE. Only Khichauri and Didachara
camp site recultivation is postponed for September 2021.

                                                                                                    18
Table 1 Tentative timetable for SDA restoration activities

    Location /     Permitted   Current Volume        Status          Planned time     Planned time
     SDA N          Storage      Used (m³)      (See drop downs)       frame for        frame for
                    Volume                                          completing re-   completion and
                      (m³)                                            cultivation     hand over to
                                                                                     AGL from AGE
  1A - Chirukhi    145,000        135,500       Closed and re-        April -2019      Completed
                                                engineered

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

 3A - Diakonidze    63,500         39,700       Closed                May-2020         Completed
 4 - Vashlovani    342,500        340,500       Closed.              Sept - 2020       Completed
   4A Zamleti       17,250         15,540       Closed, replanted      Sep-17          Completed
                                                and handed over.
        5           88,750         89,000       Closed.               Oct 2020         Completed

        6          240,000        213,500       Closed and re-      March – 2019       –Competed
                                                engineered

        7           51,000         50,300       Closed               July – 2019       Completed
       7A          172,300        170,500       Closed               May – 2019        Completed
       23          210,000         72,000       Closed                 May-19          Completed
 Camp &                                         Closed                July 2019        Completed
 Batching Plant
 – Chirukhi
 Camp Site –                                    Closed               Spring 2021       Completed
 Skhalta

 Camp Site –                                    Closed               Spring 2021       Sep 2021
 Didachara

 Storage Site –                                 Closed                May-2020       Completed and
 Akhaldaba                                                                           handed to state

 Camp Site –                                    Still in use        Spring - 2021      Nov- 2021
 Khichauri

                                                                                                       19
Table 8: Implementation of Corrective Action Plan 2019

 Objectives of Action plan                      Activities conducted/implemented                                            Status
 Objective 1. Sustained improvement in          Workshop was convened by ERM on the 23rd and 24th of April, 2019 to         ERM confirmed that
 the quality of biodiversity monitoring         address Objectives 1 and 2. The following participants attended the         quality of reports is
 reports through the delivery of training by    workshop:                                                                   improved and reached
 an experienced biodiversity specialist,        Nino Gagua-Environment Compliance Manager of AGL, Dr. Arun                  the acceptable
 continued round the year review of             Venkataraman-Technical Director, Biodiversity (ERM) and                     standard
 monitoring     reports      and       clear    Biodiversity Consultants:
 communication of project standards on          1. Dr. .Jimsher Mamuchadze, PSOVI, Birds, herpetofauna, large and           Closed
 biodiversity reporting including actions       small mammals;
 taken if suggested improvements are not        2. Dr. Rezo Goradze, Black Sea Monitoring Department of the
 realized.                                      Environmental Agency, Macroinvertebrates;
                                                3. Dr. Zurab Manvelidze. Mta Bari; Monitoring of restoration plots and
                                                invasive species;
                                                4. Dr. Archil Guchmanidze, NEKTON consulting, Fish.

                                                Details of workshop has been provided to ARUP – ERM CAP workshop
                                                report (April 2019).

 Objective 2. Defining and integrating                                                                                      Closed
 into existing or new contracts,                ERM has reviewed sample contracts AGL used to have for environmental
 responsibilities for undertaking statistical   NGOs involved in biodiversity monitoring. As was observed Ccontracts
 analysis for monitoring data, assigning        were focussing on legal obligations of the consultant, ERM
 responsibilities where possible and            recommended to strengthen the with Annex 1 which include information:
 designing and implementation of
 adaptive management measures noting                •   A terms of reference indicating locations of sampling, timing and
 when this is not possible a precautionary              frequency per year along with details on the methodology.
 approach will be followed.
                                                    •    A clause indicating that as a consequence of the trend analysis,
                                                        the consultant may be required to provide suggestions for
                                                        adaptive management and should do so in a timely manner.

 Objective 3. Identifying and contracting       ERM was appointed to provide yearly biodiversity reports to Lenders.        I
                                                                                                                            Closed.
 an independent biodiversity specialist to      First yearly report of operational phase will be provided to Lenders Feb    p r o g ress
 report to annually to the lenders              2021

                                                                                                                                                    20
7.7PR10 P              DB’ P b                            P   y 2011 – Stakeholder Engagement

(a) Implementation status of key actions:

AGL follows operations phase SEP for the Shuakhevi power project and SEP for the 35 kV OTL.

For the reporting period:

          •     Shuakhevi powerhouse serves as the PIC for the operations. Didachara camp has been
                closed down and CLO from Khulo moved to the Shuakhevi powerhouse office. Khichauri
                camp is still operational only for catering and dormitory and does not serve as PIC for
                AGL. AGE social staffing has reduced significantly, and the company did not retain their
                CLO.
          •     AGL engaged with APs of the 35kV OTL. Meetings were conducted with the purpose to
                resolve outstanding complaints related to impact on land acquired for the transmission
                line and towers;
          •     Grievances are being registered in the log and Stakeholder Engagement Register is
                being updated accordingly.

For the reporting period 38 visitors visited the Shuakhevi power plant PIC. Due to COVID-19 the
preferred communication tool for locals turned out to be phone.

Media coverage

AGL has developed Communication and PR Strategy. The document focuses on activities improving
AGL’s image in a wider public. AGL has developed partnership with several local and central media
outlets and a significant good progress was made in shaping AGL’s reputation in public.

Media coverage statistics is presented in the below chart:
Over the past six months, AGL has maintained current trend. According to the media report,
prepared by independent media resarch company IPM, media covarage about ShuakheviHPP was
mostly neutral and positive.
Key issues were particularly highly covered in media:
    • Personal stories of the locals, whose lives were changed for the better by Shuakhevi HPP.
  (10 personal sories are plannded in the cycle in media this year).
    • The news about appointment of new CEO of AGL was higly covered in the Georgian media.
    • How AGL handled the challenges associated with COVID-19.
    • Shuakhevi HPP - successful project in the energy sector in 2020. (It increased the electricity
       generated by seasonal hydropower plants in Georgia by 8% compared to the last year.)
AGL communication activities are carried out in accordance with the company's communication
strategy and media plan, where changes are made in compliance with current trends in the energy
sector and existing challenges.

        150         In Total - 88
        100
         50
           0

Positive – 17, Negative – 1. Neutral – 70, Critical - 0

                                                                                                     21
(b) Information Disclosure:

           AGL continues updating information on the Company’s website and tracks the statistics as
           recommended by the Lenders. For the reporting period:

           - There have been 9,589 unique visitors and 38,337 visits.

           The other tool for information disclosure is through article published on a monthly basis by partner
           media outlets, as well as TV interviews, video clips, social media pages on Instagram and LinkedIn.

           (c) Public Grievance Mechanism:

           AGL continues grievance registering and monitoring grievance resolution in a systematic way.
           Completion of construction activities led to a significant decrease of complaints. For the reporting
           period AGL registered the following grievances and requests from the local communities.

           Table 9: Grievances and actions taken by AGL

Grievance category    Date of the     Closure    of      Description                                  Actions taken
                      complaint       complaints
                      received
Geology,       land   July 22, 2020   August       2     The resident of Didachara village            Even though the link between the
erosion                               intermediate       claimed that tunneling works activated       project works and the actual condition
                                      response.          erosion processes on his land plot           of the complainant’s land plot has not
                                      October 30,        located near the Didachara dam and           been established AGL expressed
                                      2020               requested the Company to include him         readiness to support the complainant
                                                         into the social projects.                    and provided walnut saplings as
                                                                                                      requested by the complainant within
                                                                                                      the CSR framework.
Noise disturbance     July 23, 2020   In progress        A resident from Gurta, living upstream       AGL social team together with the
                                                         the Didachara dam, near the riverbed         safety manager visited the area and
                                                         of Adjaristsqali river complained about      checked the noise volume at day and
                                                         the noise disturbance from the               nighttime as well. It was difficult to
                                                         Skhalta-Didachara outlet tunnel. He          measure only outlet tunnel noise, as it
                                                         said that water falling from the outlet to   was high flood season and there were
                                                         the reservoir creates noise in the area      noises coming from the river itself, as
                                                         and makes it impossible to stay in the       well as a creek coming adjacent to the
                                                         area.                                        house. However, to address this
                                                                                                      grievance competently, AGL will
                                                                                                      engage skilled and knowledgeable
                                                                                                      specialists who can provide noise
                                                                                                      measuring services and produce
                                                                                                      relevant reports. Results of the noise
                                                                                                      survey will be shared once prepared.
Geology               July 23, 2020   August        2,   A complainant from Didachara                 AGL checked the area and confirmed
                                      2020               complained that a mass of land               that the area affected by the land slip
                                                         collapsed     near   the   Didachara         belonged to the Company. The
                                                         reservoir        and        requested        complainant has been notified about
                                                         compensation for the land slip.              the decision.
Geology,      house   July 29, 2020   July 29, 2020      A resident from Gurta complained that        AGL has informed him that joint
damage                                                   during blasting activities his house         inspection formed by AGL, local
                                                         located above the tunnel alignment in        consultant and Khulo Municipality did
                                                         Gurta was damaged and requested              not find any connections linked to the
                                                         the      company        to     provide       damage and construction activities,
                                                         compensation. He also mentioned that         however he received compensation
                                                         he filed a complaint against AGL to          from the municipality for the repair

                                                                                                                                    22
IFC and was waiting for their              works of his house. AGL declined to
                                                      response.                                  provide financial assistance.
Road arrangement    August    20,   September         Residents of Nigazeuli complained          AGL has an obligation to rehabilitate
on SDA 3a           2020            17, 2020          that some households failed to access      and recultivate SDAs as per the
                                                      mowing land plots located down the         projects agreed and approved by the
                                                      riverbed. A letter of request was also     Ministry of Environment of Georgia.
                                                      received from the Shuakhevi mayor          Even though the SDA area is owned by
                                                      asking assistance for the arrangement      AGL, the Company arranged a footpath
                                                      of motor road on SDA.                      on it to allow locals reach the mowing
                                                                                                 area.

                                                                                                 AGL       communicated          to    the
                                                                                                 complainants and the Mayor’s office
                                                                                                 that the Company is ready to support
                                                                                                 locals request in case the municipality
                                                                                                 applies to the MoE and receives
                                                                                                 approval from the Ministry of the road
                                                                                                 arrangement. The response from the
                                                                                                 Mayor’s office is still pending.
35kV OTL – land     August 6 and    August 15 –       Landowners complained about the            AGL is going to study all such situations
compensation        13, 2020        20, 2020          erection of towers and stringing the       in the project and compensate all
complaints                                            line without being compensated for the     whose land plots were taken for the
                                                      land taken for the Project.                project.
Water pipe damage   October   22,   October     30,   While cutting trees in Skhalta valley, a   AGL has informed NMG about the
                    2020            2020              water pipes were damaged in Cheri          complaint. NMG provided monetary
                                                      village.                                   compensation to fix the problem. Locals
                                                                                                 confirmed the complaint as closed.

         Makhalakidzeebi Community Complaint

         On July 2020 AGL and Makhalakidzeebi community met for a final joint meeting, facilitated by CAO
         and PMC via video conferencing due to travel restrictions related to COVID-19, the parties discussed
         the possibilities of continuing engagement. AGL presented once again support the Company is ready
         to extend to the villagers within its CSR framework, however, the villagers did not accept the
         partnership opportunity proposed by AGL and parties failed to reach a common agreement.

         The parties expressed willingness to continue dialogue beyond the CAP and PMC facilitation.

         Regarding the status of the court cases mentioned in previous reports, no updates have been
         registered.

         (d) Corporate sustainability activities:

         AGL developed a 3-year CSR strategy along with budget which was submitted to the Board of
         Directors for approval in February. The Strategy envisions continue implementation of social projects
         focusing on same areas, such as education, small business support programs and developing
         infrastructural projects together with local municipalities.

         During tunnel rehabilitation phase AGL signed MOUs with Chanchkhalo and Kinchauri villages on
         implementation of SME support and educational programs.

         For the reporting period, AGL financed 9 business cases in Chanchkhalo and 4 business in Kinchauri
         villages. The business ideas vary from agriculture to arrangement of guest houses and small cafes.
         Apart from it, AGL also provided monthly scholarships to 4 students from Kinchauri village.
                                                                                                         23
You can also read