Correspondence with EBRD and IFC on Construction of Masrik-1 Solar Power Station

Correspondence with EBRD and IFC on Construction of Masrik-1 Solar Power Station

EcoLur sent a letter to the international financial organizations financing Masrik-1 Solar Power Station construction project, the European Bank for Reconstruction and Development (EBRD) and International Finance Corporation (IFC).

EcoLur asked how these financial organizations assess the impact of the risks of the situation created in the conditions of the Armenian-Azerbaijani military conflict on the construction project of the "Masrik-1" solar plant. Whether it is possible that the EBRD and the IFC will use their capacity and influence to mediate the conflict in order to protect their investments.

EcoLur has submitted the response letter N 3/07.4/13313 by RA Deputy Environment Minister Tigran Gabrielyan dated on 05.10.2022 to the inquiry regarding "Masrik-1" solar plant project, which says the expert conclusion loses its validity if the implementation of the planned activity does not start within a year after the trial conclusion is issued. EcoLur’s letter also says: “We suggest that the EBRD and the IFC participate in the preparation of the new EIA for "Masrik-1" station, because the previous EIA did not meet the environmental and social standards of the EBRD and the IFC and contained some risks;

- The EIA did not propose a solution for the storage, transportation, or processing of hazardous electronic waste generated during the operation of the plant.

- In the EIA, the capacity of the fertile layer of the soil in the area of ​​the construction of the station was estimated at 70 cm-1 m. The company will not completely remove the fertile layer of soil from the site of the station, because a large volume of fertile soil will be used, which requires additional large areas and finances for storage and maintenance. In order to avoid the costs of storing the used fertile soil and maintaining the stored fertile soil, a decision was reached to remove only the soil remaining under the construction foundations during the installation of the solar panels.

It is unacceptable to build a solar plant on such fertile land and lose the fertile land that is so necessary for farming. The economic damage of losing that fertile land has not been estimated, as well as how much the damage caused will outweigh the economic benefit of building a solar plant in that area.

 - In the EIA report, the impact of the electric and magnetic field on the people and employees during the operation of "Masrik-1" solar plant was assessed as long-term and indirect, nevertheless, it is not specified what effect this field can have on human health.

- On the site of the Bern Convention, the candidate area of "Emerald" network is the entire "Sevan" National Park with 489,839.8 hectares, which also includes the construction area of "Masrik-1" station. RA Environment Ministry has not yet submitted the updated, shortened list of Armenia's "Emerald Network" candidate area to Berne Convention Bureau, which means that the "Masrik-1" station will be built in "Emerald" network candidate area.”

In its letter, EcoLur assured: “We assure you that we welcome the development of solar energy in Armenia, including the construction of "Masrik-1" solar plant. We believe that it should be built on non-agricultural lands and the project should consider all the risks and provide measures for their elimination, thus keeping high the environmental and social standards and reputation of the international financial institutions that are the investors of this project.”

In response, the EBRD provided information on the contact person of "FRV Masrik" company to address the questions to the company, whereas the International Finance Corporation has responded: in its letter No. 010-22 of December 23, 2022, Senior Country Officer Arman Barkhudaryan, on behalf of the International Financial Corporation, stated:

 “Thank you for your letter to IFC dated October 18, 2022 which raises several questions regarding the Masrik Solar project (#41106), entailing IFC’s investment in FRV Masrik (“the Company”) in Armenia. As IFC, we appreciate hearing from civil society stakeholders like yourselves and value the feedback you have provided related to the Masrik Project.

IFC is committed to ensuring its investments support private sector activities in a sustainable manner aligned with our Sustainable Policy. We take thee wellbeing of project communities and the environment seriously and expect our investee companies to follow good industry practices and to comply with national regulations and IFC Performance Standards. Regarding the key questions you raised:

Validity of the EIA.

The project related activities were initiated in a timely manner and material progress has been made. Therefore, it is our understanding that the EIA remains valid.


 Management of hazardous electronic waste.

As the first solar park to be developed in Armenia, the project’s strategy is to reduce the volume of e-waste throughout its operations by extending the lifetime of any product or its constituent parts through repair, reuse and refurbishment. Unsalvageable solar panels and components will be stored at an on-site Hazardous Waste Storage Facility before sustainable treatment/disposal options are either developed on a country-level or sourced externally.

Project site and loss of fertile soil.

As part of the project’s due diligence, the land of the project site was carefully assessed to determine its productive value and properly compensate for any loss. IFC has relied on its own appraisal and conclusions of the World Bank’s Social Due Diligence Report, which is disclosed along with the ESRS on IFC’s website (, which assessed the land use and found it to be ineffective pastureland due to over-grazing, soil salinity  and compaction. Land acquisition was a voluntary land transaction in which the community provided the land according to local legislation. The community has been paid in full based on the assessed (by a Certified Valuator) or cadastral value of the land. 

Electric and magnetic fields.

Electric and magnetic fields will be mainly generated under the overhead transmission line (OHL). The route of OHL was selected considering the proximity to residential properties. None of the properties are within buffer corridor as prescribed by local regulations.

Emerald Network candidate area.

Masrik Solar project obtained a letter from the Ministry of Environment (MoE) in 2019 confirming that the project site is not part of proposed Emerald area. The MoE informed the project Sponsor and Lenders that a Research Group on the Creation of a Network in Armenia developed and submitted to the Ministry of Environment, an Optimization Proposal of the network, according to which only some Sevan National Park sites and the small area of slopes of the middle section of the Geghama Ridge were proposed as potential Network Areas. Land plot allocated to the solar power plant is not included within the Network.

This decision was confirmed by the findings of field surveys of the area, which IFC requested for Masrik 1 Plant. Based on the outcomes of the surveys, the project area is a highly modified habitat traditionally used for grazing. There are no plant or animal species which may become extinct or are endangered, and the plant species are common and typical of pastures.

While the biodiversity values of the project site have been assessed as highly modified, IFC has conservatively applied Natural Habitat requirements because the project is located within an important Bird Area (IBA) and Ramsar site. As such, the Sponsor and IFC agreed that the project will conduct consultations with stakeholders of the Ramsar site and implement additional programs as part of its regular supervision activity.

We trust that the information provided helps answers the questions and concerns EcoLur has expressed in relation to IFC’s investment. We appreciate Ecolur’s support for tye development of solar energy in Armenia, including the Masrik project. As IFC, we will continue to employ our role as a lender to support the construction of this important project, and to work closly wih our client during the construction and operation to improv its environmental and social performance.

We thank you again for your valuable engagement on this project. We would also like to note that the FRV Masrik has also set up mechanisms for engaging with project stakeholders, and this may be a useful channel for Ecolur to engage with FRV Masrik as the project moves forward.”

December 28, 2022 at 15:35