The Bank provided a senior loan of up to USD 29.6 million (EUR 25 million) in favour of October Dry Port Company (the "Borrower" or the "Company" or "ODP"), a joint stock company established in Egypt to finance the design, development, construction and operation and maintenance of the 6th of October Dry Port ("DP6"), the first in land dry port in Egypt in the city of 6th of October, west of Cairo (signed on 09 September 2021).
The Bank is proposed to provide an additional commitment of up to EGP 206.5 million (ca. USD 10.5 million) to finance additional costs related to the Project.
The Project is the City's "trigger investment" under EBRD Green Cities Framework 2 Window 2 ("GrCF2 W2") formally initiating 6th of October's participation in the programme and enabling the start of the development of the Green City Action Plan ("GCAP") with the New Urban Communities Authority ("NUCA") for the 6th of October City.
The proposed Project will finance additional funding needs to enable the Company to complete the development and construction of the sixth of October Dry Port, the first inland dry port in Egypt and the first PPP in the sector.
DP6 will function as an extended gateway for the deep-sea ports located in the northern and eastern regions of Egypt. DP6 will be the final destination of the cargoes and will (i) provide efficient customs inspections and clearance procedures, (ii) reduce congestion in the seaports, (iii) create economies of scale by using intermodal rail services to/from the seaports and (iv) improve the overall reliability and cost-efficiency of the logistics processes of the dry port's future clients. Additionally, the Project is also expected to transfer part of the container traffic from road to railway, thus realising many social, environmental and economic benefits such as reduced road congestion, accidents and environmental emissions.
In particular, the Project will lead to significant GHG savings and air pollutants reductions and is
therefore consistent with the Green Economy Transition ("GET") Approach and is 100 % GET.
ETI score: 70
The Project's primary transition will be Green as it will result in significant GHG savings from the expected modal shift from direct truck transport from the seaports toward intermodal rail service via DP6. The Project is expected to save over 14 million litres of diesel per year (26.8% saving) as well as 40,000 tons of CO2 per year and is 100% GET.
The Project also contributes to the Competitive quality. The Project will finance the first PPP in the dry port sector in Egypt and one of the few PPPs in the infrastructure sector, promoting much needed private sector participation. Project preparation was supported by the Bank's Infrastructure Project Preparation Facility ("IPPF") ensuring compliance with the Bank's concession policy.
OCTOBER DRY PORT COMPANY JSC
October Dry Port Company ("ODP" or "SPV"), a joint stock company established as a special purpose vehicle in Egypt to implement the Project under a BOT structure. The SPV is 70 % owned by El Sewedy Electric, 20 % by SLP for Logistic Properties ("SLP") and 10 % by Schenker Egypt ("Schenker") (together the "Consortium").
EBRD Finance Summary
Total Project Cost
The Bank's financing is additional through the (i) financing structure as it provides a project finance structure with long-term financing and longer tenor necessary for the structuring of the Project and otherwise not available from commercial sources, (ii) risk mitigation as the Bank's involvement gives comfort and assurance to investors, (iii) standard setting given increased operational safeguards and environmental and social requirements and (iv) policy change as the Bank will assist the City in addressing environmental challenges through the development of a GCAP and which will also include a gender assessment, thereby contributing to gender additionality.
Environmental and Social Summary
Categorised B in line with 2019 Policy. The Project comprises the construction and operation of a greenfield dry port within industrial area located at the outskirts of city of 6th October. The Project was initially reviewed under the Bank's Project Preparation facility in 2016 and 2019 and following concession award an independent ESDD was undertaken, which confirmed that the project is likely to have site specific environmental and social impacts, which can be minimised through implementation of mitigation measures and relevant monitoring and management techniques and that the Borrower, October Dry Port Company, has the institutional capacity to undertake the Project in line with EBRD PRs.
The Project site occupies currently unused desert land, designated for industrial development and located 24 km from 6th of October City. The site or its surroundings have no sensitive environmental receptors and the closes community is located over 20km away. The key risks identified by the ESDD are related to construction stage H&S, labour management and transport impacts. These will be managed through the CESMP developed for the Project and a set of polices cascaded to contractors and subcontractors. The Borrower has already appointed a dedicated EHS manager. Approximately 1200 direct and 350 indirect jobs will be created during the construction phase. The construction contractor will build temporary employee accommodations onsite during this phase.
At operational stage, the Project will have an overall net environmental benefit due to facilitating decongesting at Alexandria and El Dekheila container terminals which will allow for faster turnaround of berthing vessels and reduce air pollutants and GHG emissions in the port area and through modal shift achieved through use of the railway infrastructure to transport cargo closer to its main destination: Cairo. Operational E&S risks are related to labour and traffic management, waste generation, hazardous substance management and OHS. These will be managed under the set up ESMS.
An ESAP was prepared for the Project and agreed with the Sponsor. The ESAP focuses on implementation of the EHS management systems for construction and operational stages in line with documentation prepared by consultants, adequate handling of hazardous substances, set up of H7S procedures in line with good international practice, cooperation with the city on traffic safety and community awareness campaigns as well as labour and worker accommodation management. The Bank will monitor the Project through annual reports and site visits as required.
Technical Cooperation and Grant Financing
Green City Action Plan ("GCAP") to identify and prioritise the City's most pressing environmental challenges, and develop a plan for investments for 6th of October City to pursue the green agenda. The GCAP methodology includes gender and inclusion and considerations. The cost of the assignment is up to EUR350,000 and is financed by the EBRD Shareholder Special Fund ("SSF"). The TC will benefit the New Urban Communities Authority (NUCA) and the 6th of October City who will be responsible for all activities in relation to the TC assignment, including the development and implementation of the GCAP.
Company Contact Information
(+202) 275 99 700 - 709
PSD last updated
11 Oct 2022
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Independent Project Accountability Mechanism (IPAM)
If efforts to address environmental, social or public disclosure concerns with the Client or the Bank are unsuccessful (e.g. through the Client’s Project-level grievance mechanism or through direct engagement with Bank management), individuals and organisations may seek to address their concerns through the EBRD’s Independent Project Accountability Mechanism (IPAM).
IPAM independently reviews Project issues that are believed to have caused (or to be likely to cause) harm. The purpose of the Mechanism is: to support dialogue between Project stakeholders to resolve environmental, social and public disclosure issues; to determine whether the Bank has complied with its Environmental and Social Policy or Project-specific provisions of its Access to Information Policy; and where applicable, to address any existing non-compliance with these policies, while preventing future non-compliance by the Bank.
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