Project description
and objectives:
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The EBRD is considering providing a long-term loan to Azer-Yod LLC which owns and operates an iodine production plant in Hasanabad, Neftchala district, Azerbaijan. The proceeds of the loan will be used to purchase and install a new production line, revamp the infrastructure and acquire additional equipment in line with the Company’s strategy to increase its design capacity and output. The iodine produced is mainly exported.
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Environmental impact:
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Screening category
The project is screened as B/1. The increased production of iodine at an existing plant has only limited environmental and social impacts, which can be readily identified and quantified in an Environmental Analysis. An audit of the existing facilities has also been carried out.
Information reviewed
A project with the same client was first proposed to EBRD in 2005. At the time, an environmental analysis and an audit were carried out for the project by independent consultants and an EAP was prepared. The current proposed project reflects the initial project with minor differences. For the current project, the original Environmental Analysis has been reviewed by the EBRD to confirm its adequacy. In addition, the site was visited by EBRD Environmental Specialists in 2007 to review the implementation status of the initial EAP which was agreed in 2005.
Environmental and social issues
The review of the Environmental Analysis report concluded that the impact analysis and the mitigation measures proposed in the 2005 report are still valid. The main environmental issues identified in that report can be summarised as follows:
- Impact on geological environment, topography and landscapes due to vehicle traffic and the construction of pipelines;
- Potential salinization of soils due to the discharge of highly saline wastewater during restoration and testing of wells;
- Treatment and disposal of sanitary wastewater;
- Discharge of the highly saline process wastewater;
- Hazardous and non-hazardous waste management;
- Preparedness to emergency situations during operations.
The environmental analysis concluded that all the health, safety and environmental risks identified in connection with iodine production rehabilitation at the project site are controllable and the risk is rated as medium /low. The Environmental Analysis indicates that, with adoption of the mitigation measures specified in the Environmental Action Plan (EAP), the overall environmental impacts of construction and operation of the project will not be significant.
Separate from the environmental due diligence carried out by the EBRD, the Ministry of Ecology has recently raised potential compliance issues with respect to wastewater discharges. Subsequently, an agency of the Ministry conducted additional tests in October 2008 which proved that the Company is in compliance. Nevertheless, the Company is willing to implement a number of measures suggested by the Ministry of Ecology. Any such requirements which are currently being discussed will also be included in the EAP.
Summary of Environmental Plan
Based on the findings of the Environmental Analysis and the review of baseline conditions, the Consultants prepared a set of recommendations in the form of an Environmental Action Plan in 2005. During the EBRD site visit in 2007, it was observed that some of the actions in the EAP were already taken. The main implementation requirements in the revised EAP can be summarised as follows:
- Carry out computer modelling of dispersion of wastewater discharges based on actual design data and based on the results identify limits for wastewater discharge;
- Restore the soil around all wells put into operation;
- Monitor soil/erosion processes;
- Remove metal scrap from the well locations and send them to specialist companies for recycling;
- Supplement job descriptions/ contracts/ agreements with a clause specifying an amenability of personnel for poaching actions;
- Continue removing sanitary wastewater by special tank trucks to the municipal wastewater treatment facilities;
- Carry out annual radioactivity surveys and take actions as necessary;
- Carry out regular monitoring of process discharges;
- Carry out a noise monitoring at locations with high noise level; provide the staff with ear plugs and ensure they are used by the staff.
The Client will also be required to provide to the EBRD annual reports on environmental and social matters.
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