EVALUATION OF ENVIRONMENTAL AND SOCIAL ASPECTS FOR HYDROPOWER PROJECTS IN TURKEY WITHIN THE FINANCING PROCESS OF INTERNATIONAL PUBLIC

BANKS
Ece Akarca Fichtner GmbH & Co. KG/Istanbul Dr. Beate Kohler Fichtner GmbH & Co. KG/Istanbul Dr. Stephan Heimerl Fichtner GmbH & Co. KG/Istanbul Gken Beceren Fichtner GmbH & Co. KG/Istanbul

ABSTRACT The country with the second largest hydro potential (about 140 TWh/year economically feasible potential) in Europe is Turkey. Hydropower is an important contributor to the energy mix of Turkey due to the countrys rising electricity demand over the years, being poor in fossil fuel sources and having no nuclear power plant in operation. Environmental assessment is very important during each phase of the hydropower projects. This paper will explain how the environmental aspects are assessed for hydropower projects in Turkey and what are the eligibility criteria considered during the evaluation period of international public banks like EIB. 1. HYDROPOWER IN TURKEY

Turkey has the second largest hydro potential in Europe with approx. 140 TWh/year economically feasible potential. The countrys rising electricity demand over the years, being poor in fossil fuel sources and having no nuclear power plant in operation makes electricity generation from hydropower a good contributor to the energy mix of Turkey. Run-of-river hydropower plants and also diversion type without reservoir are considered to be environment friendly when compared with large dam and reservoir type alternatives. Utilization of hydropower has environmental advantages such as global climate change mitigation and reduction of flooding risk, however the construction and operation of hydropower plants may cause some impacts on the local and regional level like loss of aquatic habitat, harm to fish population and deterioration of the landscape. Often, implementation of a careful and environment friendly design based on the mitigation and compensation measures can enhance integration of hydropower plants in the environment. Currently, there are more than 2,000 hydropower plant projects in Turkey which represents approximately 37% of the total economic hydro potential of the country. The government aims to utilize all the economically feasible potential (approx. 45,000 MW or approx. 140 TWh/year) by 2023. 2. ENVIRONMENTAL AND SOCIAL ASPECTS CONSIDERED AS A BENCHMARK FOR THE INTERNATIONAL PUBLIC BANKS

Most of the hydropower projects as well as other environmental friendly green energy projects are highly supported by international public banks together with local Turkish banks to strengthen Turkeys energy mix and tackle with climate change. However, the financing institutions are hiring consultants as Lenders Engineer to look closer mainly at technical, financial as well as environmental and social aspects of hydropower projects in order to assure that the required procedures and standards are met. Environmental and social considerations are very important during the design, implementation and operation of hydropower projects. The review of the Lenders Engineer evaluates the possible adverse environmental and social impacts of the projects and highlights possible mitigation measures. The review also helps the local banks, project promoters and designers to understand the importance of environmental and social considerations and also makes them to adopt tighter environmental standards. Additionally trainings are set up to develop the local knowledge. In the meantime several basic documents in regards of the environmental and social aspects are available. These documents describe the criteria required for eligible projects to be financed by the relevant institutions like the policies of the financing institutions (e.g. Environmental Strategy of World Bank; European Bank for Reconstruction and Development (EBRD) or European Investment Bank (EIB)). Also the private banks have adopted tighter environmental and social standards than the national requirements with the so called Equator Principles [1] as a credit risk management framework for determining, assessing and managing environmental and social risk in project finance transactions.

2.1. Eligibility Criteria Followed By EIB The European Investment Bank (EIB) e.g. requires that all the projects it is financing are acceptable in environmental and social terms by applying appropriate safeguards to all its operations. The bank also finances projects that contribute directly to environmental sustainability and social well-being in support of sustainable development, by virtue of their positive contribution either to the protection and enhancement of the natural or built environment and/or to the promotion of sustainable communities [2]. The goal of EIB is to stress out the importance of the environmental and social aspects related to the implementation of hydropower projects. The internationally recognised nine eligibility criteria (EC) which EIB follows during the environmental and social assessment period of small hydropower projects (SHPP) are described below. EC 1: Regulatory Compliance The project should have all the necessary permissions and permits required under national law and should comply with the requirements of the national environment, health and safety law. Electricity Generation License, Environmental Impact Assessment (EIA) decision, Water Utilization Right Agreement (WURA), Land Use Permits and Acquisition, Grid Connection Agreement, Construction Permit etc. are the main licenses/approvals which a SHPP should obtain. Among others, EIA decision is a prerequisite for all investment projects. The Turkish EIA regulation imposes obligations with regard to the projects installed capacity, water storage volume and capacity of transmission facilities. The project is either exempted from the regulation which in this case no EIA or Project Presentation File (PPF) is needed or the project is subject to an EIA/PPF submission. The thresholds of the old and new version of the national EIA regulation are summarized in Table 1. Licenses granted before the new legislation are subject to old thresholds.

Table 1: Thresholds of the old and new Turkish EIA regulations for hydropower plants and transmission facilities [3] EC 2: Water Flow The project should maintain a minimum flow in the river that is adequate for the existing fish population, wildlife and water quality taking into account seasonal fluctuations in flow levels. Also the project should preserve a minimum wetted channel perimeter, at all control structures, with a constant flow in the river throughout the year. Facility viability has to be based on minimum flow required for the river to sustain existing environment. Environmental flow is obliged in the Turkish WURA and the lower limit is defined as the 10% of the mean average flow of last 10 years data. The amount of the environmental flow to be released is calculated in the PPF/EIA studies. EC 3: Water Quality The project should not contribute to deterioration of water quality either upstream or downstream of the project during construction and operation stages. The facility should have minimal impact on water

quality in the head pond, bypassed reach and the reaches downstream of the tailrace and diversion dams / dykes. The project must demonstrate that it is in compliance with national water quality standards. EC 4: Fish Passage and Protection The project should have minimal impact on local fish populations, provide effective fish passage for local and migrating fish species and also protect fish from entrainment. There should be minimal loss of fish or fish habitat. Facility should preserve resident fish communities and ability of fish to move and migrate. Flows in the bypassed reach and downstream of the tailrace should be adequate to support aquatic and riparian species at pre-facility ranges. According to the Turkish Fishery Law article 22, in Turkey it is obligatory to construct fish passage structures at dams and hydropower plants. The project design should comply with the current accepted fish passage guidelines which are derived from the internationally accepted FAO (Food and Agriculture Organization of the United Nations) standards based on the internationally well known German standard for fish pass design. This standard has been translated into Turkish in 2009 by the national authority and it is started to be implemented for the new hydropower projects recently. EC 5: Watershed Protection The project should not negatively impact environmental conditions in the watershed. The facility should not affect the integrity of the existing ecosystem either upstream or downstream of the facility. Additional components of the facility e.g. access roads, power lines and generation facilities should have minimal impact on the riparian environment. EC 6: Threatened and Endangered Species Protection The project should not negatively impact any threatened or endangered species nor any areas designated for their protection. The facility should not be constructed on a protected or sensitive river. The facility should not threaten or harm the habitat or migration patterns of endangered species, threatened species or species of regional concern. The facility should have no significant impact on existing wildlife habitat and populations. EC 7: Recreation The project should not stop or limit recreational uses of the river. Access to the water should remain unchanged by the facility and accommodate recreational activities on the river. Any current recreational uses of the river around the site of the facility (Hunting, fishing, boating and hiking ...) should be identified and it should be confirmed that these will not be affected by the development of the facility. EC 8: Cultural Issues The project should not inappropriately impact cultural property. Cultural property includes sites having archaeological (prehistoric), paleontological, historical, religious and unique natural values. Cultural property therefore includes remains left by previous human inhabitants and unique natural features such as canyons and waterfalls. EC 9: Community Issues The project should not reduce local community use of either river or the surrounding lands. The facility should not stop or limit local communities ability to utilize the river to provide a livelihood, i.e. by fishing, as a leisure amenity or to utilize the land around the river where they may rely on the river for irrigation purposes.

3.

CHALLENGES AND EXPERIENCES FACED DURING THE REVIEW PROCESS

Not only hydropower projects but every renewable energy project can have negative environmental and social impacts if they are poorly planned. There is always a suitable solution to mitigate and minimize the environmental, social and economic concerns and optimize the projects design. The best way is to follow up the project from the very beginning till the very end. In fact it is mostly possible to improve the design of the power plant during construction stage without extremely high costs. Environmental and social aspects of the hydropower project depend largely on the natural and social environment of the affected region as well as the factors attributable to the projects themselves, such as their

size and location, so these impacts can have multiple aspects. Therefore, in selecting mitigation measures to reduce adverse impacts or enhancement measures to optimize positive outcomes, it is important to adopt tailormade measures [4]. For example, one of the major eligibility criteria to assess the sustainability of a hydropower plant is the fish passage structure designed for hydropower projects. In Turkey, constructing a fish passage structure is obligatory, however nothing is defined in the regulations about how to design them. There are international guidelines which are also adopted by the Turkish authorities. In general, it is observed that the fish passage structures are copied from each other without having an ecological survey basis. This leads to an inefficient design which blocks the migration of the fishes and therefore endangers their presence in the region. This deficiency can be altered by taking into account the target species in the region and reliable international guidelines like FAO. In many cases the fish passage structure can be improved even after it has been constructed. Furthermore, the stakeholder involvement is vital to identify practical solutions for most of the adverse impacts. Involving stakeholders the project increases their understanding of the project and also increases the support of them for the project. What is experienced so far is that there is a lack of monitoring in hydropower projects in Turkey. The regulations are well adapted from the European regulations however without a proper monitoring and supervision they are not effective. Mitigation measures are defined for the projects but implementation of these measures should be followed by monitoring, in order to check the effectiveness on the environment. The result of the monitoring allows the review of the measures so as to improve their efficiency [5]. Sustainable energy generation and a successful hydropower project cannot be measured with the efficiency of the plant or the availability of the resource. Different parameters from a variety of disciplines should be considered like preservation of flora and fauna and grievances of the stakeholders. The integration of such parameters together with the other technical parameters which define the energy generation will increase the feasibility and the quality of the project. For this reason, internationally recognised regulations, good practice guidelines and eligibility criteria as described above are essential to assure sustainable hydropower projects also in Turkey.

References [1] Equator Principles (www.equator-principles.com). [2] The European Investment Bank, The EIB Statement of Environmental and Social Principles and Standards, 2009 (www.eib.com). [3] Ministry of Environment and Urbanization - Legislation (http://www.bayindirlik.gov.tr/turkce/sayfa.php?Sayfa=yonetmeliklistesi). [4] International Energy Agency, Hydropower Good Practices: Environmental Mitigation Measures and Benefits, May 2006. [5] ESHA, Hydropower and Environment.