Sustainability Tools in Hydropower Dev’t & Operations

www.snpower.com

RODOLFO AZANZA JR.Country Representative & Business

Development Manager, SEA

21 November 2013Melia Hotel, Hanoi, Vietnam

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SN Power Key Facts

www.snpower.com

- Established June 2002 in Norway

- Owned by Statkraft (60%) & Norfund (40%)

- Business objective: Invest in clean, renewable

energy on commercial basis in selected emerging

markets

• Net installed capacity 2013: 1,358 MW• 523 employees in twelve countries• CDM projected credit volume: ~ 2 Mt/CO2 per year

In the Philippines- 50:50 JV company SN Aboitiz Power (SNAP)

Ambuklao: 105 MW /207 GWh

Binga: 134 MW / 419 GWh

Magat: 360 MW / 940 GWh

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SN Power Company Structure

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South America Asia Agua Imara (51%)

Peru

Chile

Brazil

Zambia

Sri Lanka

India

Nepal

Panama*

* Countries without power generation

Costa Rica*

Mozambique*Philippines

Vietnam (2010)*

Singapore*

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SN Power’s Competitive Advantage

www.snpower.com

– Long-term investment strategy

– Technical and financial strength; long Norwegian

hydropower tradition (100+ years)

– Understanding of power markets

– Demonstrated ability to sustainably execute

projects in difficult markets

Ability to manage environment, legal and

social issues

“WHAT YOU DO NOT UNDERSTAND, YOU CANNOT MANAGE.”

5Page03/05/2010www.snpower.com

Time

Requirements

Regulation

Area of vacation in prison

Public Expectations

Area of living in the edge

Area of good night sleep

Area of Risk

Area of Sustainability

Sustainability tools as our global

standards

Framework

?

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Our Sustainability Toolbox

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SN Power CSER Group Policy mandates adherence to principles in the:

– Global Compact

– IFC E&S Performance Standards

– IHA’s HSAP

Mapped out gaps between National Requirements VS IFC’s PS

Legal compliance alone will not assure sustainability because of these gaps

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Examples of No Gaps

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Examples of Gaps

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Binga hydro plant: IHA HSAP Ver. 2006 & Ver. 2010

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O2 Governance O7 Financial Viability

O8 Project Benefits

O5 Asset Reliability & Efficiency

O1 Comm & Consultation

O6 Infrastructure Safety

O12 Labour & Working Conditions

O13 CulHeritage O11 Indigenous Peoples

O9 Project Affected Communities & LivelihoodsO3 Environmental & Social Issues Mgt.O18 Reservoir Management

O19 Downstream Flow Regimes

O15 Biodiversity and Invasive Species

O17 Water Quality

O16 Sedi & Erosion

O10 Resettlement

O4 Hydrological ResourceO14 Public Health

0

5

Series1

C1 GovernanceC2 Economic viability

C3 Additional economic benefits

C4 Markets, innovation and research

C5 Op.Efficiency

C6 Op.Reliability

C7 Community acceptance

C8 Infra SafetyC9 Employee safety, occupational health and well-being

C10 Employee opportunity, equity and diversityC11 Suppliers and service providersC12 Cultural heritageC13 Social commitments

C14 Directly affected stakeholders (incl. local community)

C15 Envi Mgt

C16 Reservoir management

C17 Envi Flows

C18 Biodiversity

C19 Water QC20 Sedi & Erosion

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5

Series1

Sept. 2009 May 2013

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IFC’s E&S PS

- Extensive easy-to-understand Guidance Notes

- Available documents in IFC website for comparing

with your project (managing the learning curve)

- If borrowing from IFC…

Why use these tools

www.snpower.com

IHA’s HSAP

- Self assessment, numbers & proof-based

- Track your performance through the years

- Spider web shows how holistic are you, exposes

weak areas…

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These tools work!

CDM Registered under the UNFCCC

Passed very stringent scrutiny of both the Philippine DNA & the UN CDM System easily due to prior conformity with these sustainability assessment tools

www.snpower.com

Name Country MWtCO2 per year

Ambuklao Philippines 105 160,000

Binga Philippines 134 20,000

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These tools work!

Cooperation with downstream users

of water for irrigation and fish ponds.

Zero environmental non-compliance

since turnover to present

Celebrated best practice case of

building consensus with Indigenous

Peoples in Ambuklao and Binga

(resolving a 50-year land dispute

issue)

Good relations with host LGUs/IP

communities

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Key Messages

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1. Stakeholders expect hydro projects to be

sustainable

2. Compliance to law is not enough

3. There are sustainability tools:

To design good hydro projects

Basis to reject incorrigibly bad hydro projects

To operate hydro plants in the “area of good night

sleep”.