Stakeholder Engagement Plan for Business Unit Lithuania

Dalkia International

January 2011

Stakeholder Engagement Plan - Dalkia Business Unit in Lithuania

Table of Contents

1 Introduction 3

2 Description of Dalkia operations in Lithuania 5

2.1 Production facilities of Vilniaus Energija UAB 6

2.2 Production facilities of Litesko UAB 7

3 Regulatory Requirements 8

3.1 National legislation requirements – EIA 8

3.2 EBRD and IFC requirements 8

4 Stakeholder Identification 10

4.1 Overview 10

4.2 Stakeholder groups 11

5 Stakeholders Engagement Programme 18

5.1 Experience of stakeholder engagement 18

5.2 Types of information to be disclosed 21

5.3 Methods of communication 21

5.4 Language of communication 22

5.5 Program of activities 22

5.6 Timetable 23

6 Grievance Mechanism 24

7 Updating and Reporting 27

1 Introduction

The present Stakeholder Engagement Plan (hereafter SEP) is developed by Lithuanian subsidiaries of Dalkia International (hereafter Dalkia) - Vilniaus Energija UAB (hereafter VE) and Litesko UAB (hereafter VE). This SEP is prepared in line with the IFC and the EBRD policies and requirements to describe the identified key stakeholders and the information and communication activities planed by Dalkia with regard to the usual business activities in Lithuania.

The stakeholders are any parties (individuals, groups, organisations) which can be affected by the usual business activieties or can be interested in it. The SEP is prepared with the objective to present the methods, procedures, policies and actions elaborated to inform stakeholders, in a timely manner, about the potential impacts and benefits of their business activities. Furthermore, this document describes the way on how any concerns or grievances will be handled by VE and LTE.

This document provides a time schedule for consultations and the approach to handing of concerns and grievances.

The SEP takes into account the best international practice in relation to information disclosure and outlines the general engagement principles that Dalkia Business Unit (BU) in Lithuania will adopt and those which will be used for the current modernization program.

The SEP will be reviewed and updated as necessary. This SEP is also disclosed on the webpages of Dalkia companies in Lithuania (http://www.vilniaus-energija.lt and http://www.litesko.lt/SEP). The SEP can be provided by e-mail on request received by e-mail, letter or phone call.

The contact details of Dalkia staff in Lithuania responsible for development, updating and implementation of this SEP and for the grievance mechanism are as follows:

Raimondas Valentinas Stiga

Project performance director, UAB Vilniaus energija

Jočionių g. 13, LT - 02300 Vilnius

Tel. 266 7201, Cellular phone +370 698 21978, Fax. +370 5 266 73 49

Email:

Rita Kinduryte

Environmental Quality and Service Engineer, UAB Vilniaus energija

Jočionių g. 13, LT - 02300 Vilnius

Tel. 266 73 24, Cellular phone +370 687 78322, Fax. +370 5 266 73 49

Email:

Alius Čepononis

Engineer, UAB Litesko

Jočionių g. 13, LT - 02300 Vilnius

Tel. 266 7516, Cellular phone +370 652 93801, Fax. +370 5 2667510

Email:

The identified key stakeholders are listed this document. Any other interested parties can contact the responsible persons listed above and get involve in future information and communication activities.

2 Description of Dalkia operations in Lithuania

Dalkia BU in Lithuania includes operations of 4 private companies:

• UAB Vilniaus Energija

• UAB Litesko

• UAB Dalkia Lietuva

• UAB Druskininkų Dujos

Activities of Dalkia Group companies in Lithuania cover the majority of Lithuanian regions. VE exceptionally supplies the population and companies of Vilnius city and Vilnius district, while LTE subsidiaries are distributed within the entire Lithuania.

Most of real estate currently managed by the companies is under the state Central Heating Company. In the case of VE, Vilnius central heating systems were leased since 1 February 2002 for the period of 15 years. In the case of LTE, signing of similar contracts on the lease of central heat supply systems of cities was started since 1998, agreements are signed for 15-30 years period (see Fig. 1).

Figure 1: Dalkia BU energy production facilites in Lithuania

Below are described energy production and transfer facilities of VE and LTE that are main business focus of Dalkia in Lithuania.

2.1 Production facilities of Vilniaus Energija UAB

VE operates the district heating network and energy generation facilities in Vilnius. The major part of consumers are served through the integrated district heating (DH) network, which supplies up to 95 per cent of heat provided by the DH sector and the remaining DH consumers are connected to another three small DH systems or individual boilers.

In a normal operation mode in wintertime, two combined heat and power plant (CHP) units at the power plant TE-3 can supply up to 602 MW of heat, with 155 MW of heat being supplied directly to the integrated district heating network and the remaining heat amount being transmitted to power plant TE-2 and supplied via the power plant TE-2 network. Additional amount of heat is produced at TE-2 power plant depending on the demand of the city. A simplified scheme of Vilnius DH integrated network is presented in Figure 2 below.

Figure 2: Simplified scheme of Vilnius DH integrated network

During summertime, the heat demand is about 100 MW and is fully covered by VE2 power plant.

During the recent years, only TE-2 and TE-3 power plants have been utilised for heat generation. The boiler houses RK-7 and RK-8 are partly in mothballs or kept as reserve capacities for heat supply in the system.

Separate small DH networks or individual boilers supply heat to consumers in the neighbourhood of Naujoji Vilnia, Grigiskes and Salininkai districts. In Naujoji Vilnia, VE operates the boiler house RK-2 with the total installed capacity of 81 MW.

In Grigiskes, VE operates only the DH network and supplies the heat generated at a boiler house of Grigiskes paper mill.

Other small groups of consumers and detached dwelling houses are supplied with heat generated at 39 small boiler houses or individual boilers with the total capacity of 32.5 MW.

2.2 Production facilities of Litesko UAB

At present LTE operates in Lithuania 59 boiler plants, the total capacity of which makes 1251 MW. 70% of produced heat is supplied to tenants and the remaining 30% go to commercial, industrial, economic and public purpose objects. 29 of LTE operated objects are >1 MW and hold integrated pollution prevention and control permits.

LTE carries out its activities in 8 districts of Lithuania. Below is given a list of separate LTE subsidiaries and territories serviced by them (facilities >1 MW):

• „Palangos siluma“ operates 3 boiler houses in Palanga and Šventoji;

• „Kelmes siluma“ operates Mackeviciaus and Nepriklausomybes boiler plants, from which heat is supplied to Kelme;

• "Marijampoles siluma“ operates 8 boiler houses, which serve Marijampole, Kazlu Ruda, Triobiskiai, Meskuciai, Kumelionys, Patasine, Palios and also Sargenai hospital;

• „Telsiu siluma" operates 4 boiler houses, from which heat is supplied to Telsiai and Rainiai;

• „Vilkaviskio siluma“ operates 3 boiler houses, from which heat is supplied to Vilkaviskis, Virbalis and Kybartai;

• „Alytaus energija" operates 2 heat production boiler houses. One of them - Alytaus RK also produces electrical energy (nominal electrical energy capacity is 9,2 MW). Heat from both boiler plants is supplied to Alytus town. Birzu siluma operates 3 boiler houses, serving Birzai Nemunelis and Radviliskis cities.

• Druskininku siluma" operates 3 boiler houses and serves Druskininkai, Vieciunai and Liepalingis.

LTE subsidiaries Alytaus energija also operate mobile boiler house, the capacity of which is 3,5 MW. This boiler house is used only on demand.

Four facilities of LTE are larger than 50 MW in capacity and for the reason they are attributed to the facilities of Annex I of the European Union Directive 96/61/EC “On integrated pollution prevention and control”.

Table 1: List of such LTE facilities

Litesko UAB subsidiary/facility / Total thermal capacity, MW
Alytaus energija/ Alytaus district boiler plant / 446.80
Druskininkų šiluma / Druskininkų DBP / 124.20
Marijampolės šiluma / Marijampolės DBP / 245.90
Palangos šiluma / Palangos district boiler plant / 91.00

2.3 Proposed project activities

Description of proposed project activities at VE and LTE facilities and the program of stakeholder engagement activities for both companies are provided in Annex I of this SEP.

3 Regulatory Requirements

The regulatory framework relevant for Dalkia's usual business activities in Lithuania is defined by the Environment or Nature Protection Department with regard to the boiler flue gas emissions, by the Labour and Social Department with regard to all the labour and staff issues and by the Urban Development Department with regard to any modifications or developments associated with district heating networks.

Regulatory requirement regarding heat tariffs defines them as the public information which must be disclosed with at least one month public notice before any change in the tariffs comes into force.

According to regulatory requirement of VE and LTE assets owners (local municipalities and municipal heating companies), the annual reports are to be issued giving the main information in regard to the service quality and implementation of the investment commitments.

Public consultations and information disclosure during the projects preparation and implementation will be carried out in line with requirements of the Lithuanian legislation and in accordance with the policies and procedures of the EBRD and IFC.

3.1 National legislation requirements – EIA

With regard to the business activities of Dalkia BU in Lithuania, wide range of VE and LTE projects have to comply with the EIA Directive (85/337/EEC) adopted in the Lithuanian Law on environmental impact assessment of the proposed economic activity. The Directive's article 15 "Access to information and public participation in the permit procedure" is of specific relevance. Through Environmental Impact Assessment process it includes regulatory requirements for the public hearings or other forms of information disclosure for environmental impacts related to new construction and upgrading projects. This procedure is in line with the Aarhus Convention.

3.2 EBRD and IFC requirements

Requirements of EBRD and IFC regarding SEP are contained in the following documents:

• EBRD - Consultation and Disclosure Requirements - Guidance for Category B Projects. EBRD Environment Department.

• EBRD – Guide to Performance Requirement 10; Information Disclosure and Stakeholder Analysis, EBRD Environmental and Social Policy.

• IFC – Guidance Note 1. Social and Environmental Management Systems.

• IFC – Guidance Note 4. Community Health, Safety and Security.

The key principles of effective engagement formulated in the above documents can be summarized as follows:

• Providing meaningful information in a format and language that is readily understandable and tailored to the needs of the target stakeholder group(s);

• Providing information in advance of consultation activities and decision-making;

• Providing information in ways and locations that make it easy for stakeholders to access it and that are culturally appropriate;

• Respect for local traditions, languages, timeframes, and decision-making processes;

• Two-way dialogue that gives both sides the opportunity to exchange views and information, to listen, and to have their issues heard and addressed;

• Inclusiveness in representation of views, including ages, women and men, vulnerable and/or minority groups;

• Processes free of intimidation or coercion or incentivisation;

• Clear mechanisms for responding to people’s concerns, suggestions, and grievances;

• Incorporating, where appropriate and feasible, feedback into project or program design, and reporting back to stakeholders.

4 Stakeholder Identification

4.1 Overview

The stakeholders are individuals and organizations that may be directly or indirectly affected by the project either in a positive or negative way, which are interested in the project and/or wish to express their views.

VE and LTE have undertaken an initiative to identify its key national and stakeholders for their usual business activities. In doing this the following definitions have been applied:

• Stakeholders: any person, group or organization with a vested interest in the outcome of a body of work;

• Key stakeholder: any stakeholder with significant influence on or significantly impacted by, the work and where these interests and influence must be recognized if the work is to be successful.

There are partnerships and formal advisory arrangements and also less formal but important relationships with groups or individuals with a particular interest in the work VE undertakes.

Information shared with the stakeholders depends on their own concerns and needs. Among them are tariffs, availability and quality of services, emissions, environmental impacts, new projects, employment opportunities, hotlines and maintenance of networks. By periodically updating the present SEP Dalkia BU in Lithuania will keep record of questions, complaints, publications, etc. and of responses provided.

VE and LTE also have a formalized grievance mechanism (see Chapter 7 for more details). The grievance mechanism has been developed and implemented to cover both the construction and operational phases of the planned projects. The grievance mechanism will be also incorporated into the environmental, health and safety management system that the companies will implement for all production sites.

4.2 Stakeholder groups

Stakeholders can be grouped according to their "geographical scale" and interests or roles in the project. The geographical scale categories could be:

• International (acting in various countries);

• National (acting country-wide);

• Regional (acting in city, region);

• Local (acting in district, community);

• Internal (employees).

The interests of stakeholders identified with regard to the Dalkia business activities in Lithuania are listed in Table 2, also including the contact details of the stakeholders.

Table 2: Key stakeholders of Dalkia BU in Lithuania

Stakeholder Group / Key Stakeholders / Specific Interests /
International investors / EBRD – London
EBRD Lithuania Office, Šeimyniškiu 1A. 4th Floor, LT-09312 Vilnius, Lithuania