Environmental & Social Due Diligence for Solar Farm Portfolios

Challenge

The Client aimed to invest in solar energy projects across six countries, including Malaysia, Singapore, Philippines, Bangladesh, Indonesia, and China, with additional projects in Thailand. These projects varied from small residential solar installations to large utility-scale facilities. The primary challenge was conducting Environmental and Social Due Diligence (ESDD) in non-OECD countries, where the regulatory environment is often less robust.

The Organisation for Economic Co-operation and Development (OECD) is an international organization that works to build better policies for better lives, focusing on fostering economic growth and stability. In this context, the challenge was exacerbated by issues such as land acquisition in Bangladesh and biodiversity management in both Bangladesh and Malaysia. Additionally, the fund needed to reconcile risks across different solar platforms, including rooftop, ground, and floating installations.

Inogen Solution

ESC was engaged as a consultant and advisor to conduct comprehensive ESDD studies. The process involved assessing local partners' operations, management systems, and compliance with local regulations, as well as international standards like the IFC Performance Standards and SFDR/DNSF. ESC focused on critical areas such as biodiversity and land acquisition management while reconciling risks across various solar PV platforms. They developed an Environmental and Social Action Plan (ESAP) to address identified gaps.

Client Benefits

ESC's strategic approach was instrumental in identifying corporate-level gaps in environmental and social activities. By selectively reviewing high-risk projects, the Client could efficiently implement corporate E&S procedures. This enabled the fund to quickly identify and address critical gaps, facilitating the progression of the investment deal and supporting the broader energy transition in the region.