EcoLur's Letter on Monitoring of "Masrik 1" Solar Photovoltaic Plant Construction

EcoLur has dispatched a letter to RA Environment Minister Hakob Simidyan, International Finance Corporation Armenia Senior Investment Officer Arman Barkhudaryan, Head of Yerevan Resident Office of the European Bank for Reconstruction and Development George Akhalkatsi, General Director of "FRV Masrik" CJSC Tristán Higuero and Authorized Representative of "FRV Masrik" CJSC Deniz Saidov submitting the findings of the monitoring on the construction of “Masrik 1” solar photovoltaic station construction project and its proposals in this regard.

EcoLur’s letter says:

""EcoLur" Informational NGO carried out monitoring of "Masrik 1" solar photovoltaic plant construction project with the financial support of "Community Resource Exchange" non-profit consulting company.

Within the framework of this project, the EIA report of  "Masrik 1" project (hereafter the Project) was examiner, as well as the ESIA, the environmental impact expert report, the decisions of RA Government regarding the Project, RA Law "On Expropriation of Property for Needs of Society and State", RA Law "On Wastes", RA Law "On Environmental Impact Expert Assessment and Expertise", the standards of the International Finance Corporation (IFC) and those of the European Bank for Reconstruction and Development (EBRD), which financed the project, the Berne Convention.

Visits were made to the settlements affected by the Project, meetings were held with the Vardenis Local Government, the administrative heads and residents of Mets Masrik and Arpunq settlements, during which the Project was presented, and the information collected about "Masrik 1" station prepared by EcoLur was discussed. Correspondence was carried out with RA Environment Ministry, the financial investors of the Project - International Financial Corporation and European Bank for Reconstruction and Development, and the Project implementing company - "FRV Masrik". The results of the study are presented below.

On Environmental Impact Expert Assessment 

RA Ministry of Environment issued the positive conclusion of the environmental impact assessment BP 000061 to "Masrik 1" solar photovoltaic plant construction project on 17.07.2019.

The project is implemented in Vardenis area in Gegharkunik Region, on the shore of Lake Sevan, in the field of Masrik, in the territory of Mets Masrik settlement.

Because of the COVID-19 pandemic and the 44-day war, construction of the station was not completed until 2022. The construction completion date of "Masrik-1" solar photovoltaic station has been extended by more than a year. The construction of the station was supposed to be completed on July 1, 2022. Under RA Government resolution N 997-A of June 30, 2022, the construction period of the station was extended until September 1, 2023.

In response, RA Environment Deputy Minister Tigran Gabrielyan informed by letter N 3/07.4/13313 dated on 05.10.2022. "In response to your letter dated on September 9, 2022, I would like to inform you that according to RA Law "On Environmental Impact Assessment and Expertise" (hereinafter referred to as the Law), the expert assessment opinion laid down in Article 20(7) loses its validity if the planned activity does not commence within one year after the issuance of expert assessment opinion." An expert assessment opinion is considered invalid by law. According to Clause 6 of the same article of the law, without a positive expert assessment opinion, the adoption of the founding document or the implementation of the planned activity is prohibited."

On Land

The area of ​​the station will make up 128.3 ha, the length of the station fence will be 5870 m. The station will be located in the central part of the Masrik field. The EIA report on the location of the station states: "Masrik 1" solar plant is located in the central part of the Masrik field.... The main part of the land requested for "Masrik 1" plant is occupied by meadow and black soils.... The capacity of the fertile layer of the soil in the area requested for "Masrik 1" plant is large, sometimes exceeding 1 meter."

According to the EIA, the Company will not completely remove the fertile layer of soil from the site for the following reason. "Since the capacity of the fertile soil layer to be exploited is 70cm on average, it turns out that a large volume of fertile soil is exploited, which requires large areas for storage and maintenance. In addition, the land areas to be disturbed for the construction of the solar plant remain mostly under construction and thus the bulk of the fertile soil used will not be used on site for reclamation purposes.

In order to avoid the costs of storage of used fertile soil and conservation of stored fertile soil, it was decided to remove only the soil remaining under the construction foundations during the installation of solar panels," the EIA report states. According to EIA, a total of 18,129 m³ of land will be removed. It will be stored at the edge of the solar plant.

In reply, IFC letter says: “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.”

“FRV Masrik” CJSC also gave a similar response: “As part of the project’s due diligence, the land of the project site was carefully assessed 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.”

It should be noted that Armen Asatryan, Administrative Head of Mets Masrik settlement, told EcoLur that the company gave 82 million AMD to the community for 97 hectares of pasture. With that money, the streets of the village were paved, three grain harvesters were purchased, and the cemetery was improved. Another 32 hectares were sold directly for 195 AMD per square meter.

On Electronic Waste

Used engine oils, used tires, and construction waste are mentioned as waste in the EIA. According to the company's website, Masrik 1 solar PV plant will require slightly more than 180,000 PV panels (https://frv.com/wp-content/uploads/2019/05/Non-Technical-Summary-Project -Masrik-ARM.pdf), whereas the EIA lists 165,368 panels.

The EIA report says what toxic compounds the PV technology contains, “The PV technology is based on the effect of the sunlight (photons) on the molecular structure of some materials. These materials must be semiconductors, for example Silicon, Cadmium telluride (CdTe), Copper indium diselenide (CISG), Gallium arsenide (GaaS) and other organic materials. These materials, under the effect of sunlight, have the property of produce electrons movement, absorbing then the energy of the photons.”

The lifetime of solar plant structures produced worldwide is estimated to be 15-30 years. Expired panels are recyclable waste. The risks of the project are:

• The actual volume of e-waste is unknown
• EIA lacks information on the effects of toxic compounds in e-waste on human health and the environment.
• EIA lacks information on measures aimed at reducing or neutralizing the risks of e-waste, financial responsibility for it.

Responding to EcoLur's inquiry, IFC and “FRV Masrik” CJSC stated in their letters about 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.”

"Masrik 1" Solar Plant In "Emerald" Network Candidate Area

The area of ​​ "Masrik 1" solar plant is located in the candidate area of ​​"Emerald" network in Gegharkunik Region. RA Environment Ministry informed EcoLur in 2021, “In 2019, the working group submitted proposals for the optimization of "Emerald" network to Environment Ministry. According to these proposals, Gegharkunik region includes 4 potential areas of "Emerald" network with a total area of ​​82421.8 ha, therefore the area allocated to the solar power plant is outside the boundaries of "Emerald" network of Gegharkunik Region.”

On the website of the Berne Convention, the entire area of ​​Sevan National Park with 489,839.8 hectares is a candidate area for the Emerald network (https://emerald.eea.europa.eu/). The year of data collection is mentioned as 2021.

The Bureau of the Berne Convention, in its decision adopted at the meeting held in April 2022, once again expressed its concern regarding the significant reduction of the Emerald Network areas planned in Armenia and again urged the authorities to clarify when the revised list will be ready and submitted to the Secretariat.

Regarding the location of "Masrik 1" solar photovoltaic plant construction project in the candidate area of ​​"Emerald" network, IFC and "FRV Masrik" CJSC have informed, “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. To the abovementioned, the IFC added, “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.”

On Impact of Electric and Magnetic Fiel

According to EIA, in case of operation of the plant, the effect of electric and magnetic field on the public and employees was assessed geo-term, indirectly. However, actions to mitigate the effect of the magnetic field are not clear.

In this regard, IFC and “FRV Masrik” CJSC informed EcoLur, “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.”

On Awareness of Impacted Community

The local government of the affected Vardenis enlarged community, as well as the administrative heads and residents of Mets Masrik and Arpunq settlements, are not properly informed about the EIA report of the construction project of "Masrik 1" solar photovoltaic plant, the actions provided by the document, and the risks. Mets Masrik community, which is the Project affected community, was incorporated into the newly consolidated Vardenis community in 2021. Thus, Vardenis Consolidated Community Local Government and the general community did not participate in public discussions about the Project, were not informed about the presented documents, the Company's obligations.

In Arpunq settlement, they were unaware of land alienation issues, arguing that as a result of community expansion, the Company did not carry out paperwork with them. In the territory of the settlement, RA Government with its decision N 742 of May 14, 2020, public eminent domain was recognized over a total of 0.013778 hectares arable land owned by the residents. "FRV Masrik" Company signed an agreement on compensation and assistance with the residents from whom it took land in connection with the construction project of "Masrik-1" solar photovoltaic power plant.

Compensation for crops, one-time compensation for termination of tenancy and annual subsidy for termination of tenancy for a period of 20 years have been provided.

No social support programs are implemented for the affected settlements in the frame of the Project.

Conclusion

1. According to Article 20 (7) of RA Law "On Environmental Impact Assessment and Expertise", the positive conclusion of BP 000061 should be considered invalid, but the Company claims that the conclusion is valid.
2. Basically, fertile land was allocated for the construction of the solar plant in a flat area, which is very valuable for agricultural activity in the conditions of the complex, mountainous relief of Gegharkunik Region. Fertile soil will be subject to erosion during the exploitation of the plant. During the EIA examination, the high importance of fertile land and its agricultural value were ignored. Data on fertile land in the EIA report and in the responses of the IFC and the Company are conflicting.
3. The EIA did not calculate the expected benefit and loss from "Masrik 1" solar plant project in relation to other socio-economic activities.
4. The EIA does not provide social support to the affected community.
5. The EIA does not envisage a measure regarding the damage of 165,368 photovoltaic panels with an installed capacity of 375 W or their storage or recycling after operation.
6. Actions to protect the panels from the risks of natural phenomena such as blizzards, hailstorms, hurricanes, and earthquakes are not specified.
7. It is not specified how much waste the decommissioned panels, media will generate, how they will be stored safely before being transferred to the licensed companies. In addition, there are still no companies in Armenia that are engaged in the processing or utilization of such waste.
8. The affected community is not fully informed about the Project, when the works will continue, when they will be finished, what environmental measures will be implemented, how much money will be spent to implement those measures.
9. In Arpunq settlement, “FRV Masrik” CJSC signed compensation and assistance agreements with some residents, by which it will provide assistance to the residents in return for the termination of the lease right for 20 years. Although small, this assistance to keep the resident in the border village is evaluated positively, because it is one of the reasons for staying in the village.

Proposals to Environment Ministry

1. Considering the requirement of Article 20 (7) of RA Law "On Environmental Impact Assessment and Expertise", revoke the positive conclusion of the environmental impact assessment report BP 000061 of "Masrik 1" solar photovoltaic plant construction project and appoint new expertise.
2. At the stage of new examination, consider the existing gaps:

Problem of e-waste management, the problem of erosion of fertile soil, to assess the socio-economic benefits and harms of the implemented project, to provide socio-economic support to the affected population.

3. Publish an optimized list of Emerald network candidate areas to exclude the location of the Masrik 1 station construction site in that area.

to "FRV Masrik"

1. To ensure the awareness of the Vardenis affected community regarding the implementation process of the Project.
2. To ensure the full participation of Vardenis affected community in monitoring the implementation of the Project.
3. Within the framework of the project, to ensure the proper protection of the fertile layer of the soil, submit a plan of measures.
4. To plan measures for storage, use, recycling of electronic waste.
5. To carry out the calculation of the expected benefits and losses from "Masrik 1" solar plant project, to take measures to minimize the losses.
6. Within the framework of the project, to plan socio-economic development programs for the community within the framework of corporate social responsibility.

We propose to discuss our conclusions and the recommendations arising from it within the framework of your coordination issues, to take them into account in the process of reducing negative impacts on the environment, settling local and international issues related to the Project".

January 24, 2023 at 15:45