This paper discusses the common environmental issues and requirements project lenders have when financing hydropower dam projects in developing countries. The environmental specialist’s role, as part of the Lender’s Technical Advisor team, is discussed throughout the main phases of project finance (credit approval, financial close, lending/construction and loan repayment/operation). Further, how environmental issues are reviewed and monitored, thereby minimising reputational risks to the lenders are outlined.
Lenders typically consider hydropower dam financing, especially reservoir schemes, as high reputational risk loans. Finance is usually syndicated and although most international lenders are Equator Principles signatories or use the International Financing Corporations (IFC) Performance Standards, some lenders have additional environmental guidelines and requirements to enable financing. These differences are discussed.
Common environmental concerns include loss of habitat of endangered and/or threatened species, changes to river flows, erosion and sediment control during construction, and the minimisation and disposal of project wastes.
These issues are discussed drawing on the author’s experience in monitoring environmental issues of hydropower projects in Asia Pacific and Africa, including both smaller run-of-river schemes and larger storage reservoir projects.
Keywords: Environment, impacts, project financing, concerns, lenders, lenders technical advisor.
Monique de Moel, Mark Arnold, Gamini Adikari
Monbulk Saddle Dam, built in 1929, is one of two saddle dams located at the southern end of Silvan Reservoir, near the township of Monbulk, Victoria. The saddle dam is a 5.3m high earthfill embankment with a 230mm wide, centrally located, concrete core wall. The reservoir retained is located in the valley of Stonyford Creek, and impounds approximately 40,500 ML of water at FSL.
Excessive seepage at the right abutment of Monbulk Saddle Dam has been an issue since the early 1970’s. The reservoir has been operating with a level restriction since then to reduce the seepage flows. However; this restriction limits the operational flexibility of the storage. Early investigations concluded that the most likely mechanism for these excessive seepage flows was a defect in the concrete core wall.
Melbourne Water Corporation, (the owner and the operator of the reservoir), undertook a risk assessment for Silvan Reservoir as part of a review of its dams asset portfolio. Based on the information then available, the risk assessment was undertaken using the criteria and guidelines developed by ANCOLD. The result was that the piping risks associated with the seepage from the west abutment at Monbulk Saddle Dam was unacceptable. The risk assessment Panel also cast doubt on the likelihood of the seepage being caused by a defect in the concrete core wall. Melbourne Water therefore engaged SMEC Australia to investigate the likely causes and mechanisms for this seepage and to develop suitable remedial measures for the dam.
The investigations have included a desktop review of historical information, test pit investigations, Sonic borehole drilling, dynamic cone penetration tests, an infrared thermal imaging investigation and an electromagnetic groundwater seepage flow mapping investigation.
These investigations have shown that the most likely cause of the seepage is the presence of permeable foundation layers located beneath and around the existing core wall as the core wall does not extend over the full length of the embankment and becomes shallower towards the abutments.
To satisfy the ALARP principle; risk reduction remedial works Concept Designs are being developed and reviewed.
2011 – Investigating the Piping Risk Associated with Seepage at Monbulk Saddle Dam of Silvan Reservoir, Victoria
B. Ghahreman Nejad, H. Taiebat, M. Dillon and K. Seddon
One of the causes of tailings dam failure has been seismically induced liquefaction during earthquakes. Liquefaction, if mobilised, significantly reduces the stiffness and strength of affected soils in the embankment dam or its foundation and may lead to large deformations and dam failure. This paper reports the results of seismic liquefaction assessment and deformation analyses of Bobadil tailings dam located in Tasmania. The tailings dam consists of a perimeter rockfill starter dam which has been raised in stages using the “upstream” construction method. The embankment raises (formed by clay or coarse tailings) are constructed over a foundation of previously deposited tailings in the impoundment which is potentially susceptible to liquefaction. Extensive field and laboratory tests were carried out to assess the tailings liquefaction potential and also to determine the material properties required for seismic stability and deformation analyses. Numerical modelling of seismic liquefaction and deformation analyses were carried out to predict the magnitude and pattern of deformations that may lead to uncontrolled release of tailings. The results of these analyses are presented and compared with literature report of those observed during past earthquakes.
2011 – Numerical Modelling of Seismic Liquefaction for Bobadil Tailings Dam
T. Mortimer, J. McNicol, P. Keefer, W. Ludlow
CS Energy’s Kogan Creek Coal Mine located in the Surat Basin in Queensland, services the 750MW coal fired, Kogan Creek Power Station. Strip mining generates large volumes of mine waste which is typically used to construct waste dumps. Recent work at the mine has focused on using mine waste to construct an ash storage facility to store ash that is piped over 5 km from the power station as a dense phase slurry. The use of mine waste to construct the ash storage facility provides significant cost and time savings, however a range of design, construction and operation issues needed to be addressed to operate a facility of this type.
This paper describes some of the key design, construction and operation considerations for the ash storage facility. Design considerations include pipeline transport through environmentally sensitive areas, addressing the stability of the embankment and the use of a partial LLDPE geomembrane lining system to reduce the risk of seepage from the storage. Construction considerations include post construction (pre ash deposition) floor treatment to reduce potential settlement. Operational considerations include ash slurry deposition, water management of the decant pond and progressive rehabilitation of the final landform.
2011 – Design, Construction and Operation of a Partially Lined, Ash Storage Facility Constructed from Mine Waste
Robert Keogh RPEQ, CE Civil (Hon), Mal Halwala, Peter Boettcher, Renee Butterfield
SunWater is a Government Owned Corporation (GOC), operating in a competitive market on an equal commercial footing with the private sector. SunWater owns 23 referable dams. Over the last fifty years there has been significant development of the methodologies used to estimate extreme rainfall events. These have resulted in substantial increases in probable maximum flood (PMF) estimates for most of SunWater’s dams.
SunWater has undertaken a Comprehensive Risk Assessment program across its portfolio. SunWater now has a good understanding of the deficiencies and available risk reduction options for each dam under all load conditions. The total cost to rectify all deficiencies is several hundred million dollars and well beyond the financial capacity of the organisation in the short term.
ANCOLD and Regulators have different published opinions on decision making criteria for dam safety upgrades. Once the conditions for the tolerability of Societal and Individual Risk are satisfied the onus remains with the dam owner to meet the ALARP principle. The decision making process is complicated by uncertainties in inputs to risk assessments. The authors have considered these uncertainties as well as the legal implications, differing ANCOLD and Regulator requirements, and business and economic loss, in formulating the decision making process. The methodology is simplified but effective. If the process is followed the dam owner’s investments will meet ANCOLD, Regulatory, legal and business requirements.
This Paper details a logical decision making process designed to allow a non technical Board to balance social, legal and financial objectives. The process considers overall risk, tolerability, the ALARP principle, and project prioritisation. The process is being used by SunWater to determine the Acceptable Flood Capacity of each dam, which dams will be upgraded, priorities and scheduling of each upgrade.
How SunWater, as a commercial dam owner makes investment decisions for dam safety upgrades