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IFC Issues New Guidance for Phased Development Projects: What it Means for Staff

The International Finance Corporation (IFC) has released new procedural guidance for the appraisal and supervision of early- stage projects like Lydian investment. As part of its updated Environmental and Social Review Procedures (ESRP) Manual, the guidance aims to provide a strengthened approach to project categorization, environmental and social risk analysis, and mitigation.

Key Takeaways for Staff

Early Equity Mining Investments

  • Projects like Lydian’s investment in Armenia will fall under the scope of ESRP 13.

Phased Development Approach

  • The guidance emphasizes a phased development approach, which may present challenges for IFC specialists addressing early-phase investments in complex environmental and social contexts.

Cumulative Social Effects Assessment

  • CAO has raised concerns regarding gaps in IFC’s guidance on ensuring full and integrated assessments of the combined or cumulative social effects of projects.

Recent Events at Amulsar

  • May 2018: A change in government in Armenia led to increased civil society activism, with demonstrations and road blockades targeting the mining sector, including the Amulsar project.
  • June-July 2018: Road blockades prevented construction equipment from entering the site, with Lydian reporting access blocked for a total of 14 days.
  • July 6, 2018: The Prime Minister visited the project area, calling for a fact-based approach and suggesting establishing a trustworthy trilateral mechanism to address environmental concerns.

Implications for Staff

Project Categorization

  • Ensure that early-phase investments are properly categorized and assessed for potential environmental and social risks.

Environmental and Social Risk Analysis

  • Conduct thorough risk assessments to identify potential impacts on the project’s surrounding community and environment.

Mitigation Measures

  • Develop effective mitigation measures to address identified risks and ensure compliance with IFC’s E&S policies.

Conclusion

The new guidance aims to strengthen IFC’s approach to early-stage projects, emphasizing a phased development approach and enhanced environmental and social risk analysis. As staff, it is essential to understand the implications of this guidance for our work on projects like Lydian’s investment in Armenia.