GrCF2 W2 - CML2: Sustainable Urban Transport Loan

Location:

Egypt

Project number:

52385

Business sector:

Municipal and environmental infrastructure

Notice type:

State

Environmental category:

B

Approval date:

06 Jul 2022

Status:

Signed

PSD disclosed:

19 Aug 2021

Project Description

EBRD is considering to provide a Sovereign loan of up to EUR 250 million to the Arab Republic of Egypt to finance the rehabilitation and upgrade of Cairo Metro Line II ("CML2") and related communication equipment in the existing rolling stock fleet (the "Project"). 

Project Objectives

The Project is part of an overall investment package estimated at EUR 550 million, which is expected to be co-financed by the EIB and the GoE. The rehabilitation of CML2 aims to upgrade/replace signalling, safety, power, control & electromechanical systems and civil works necessary to achieve an operational headway of 105 seconds (from the current 160 seconds) ultimately increasing the overall capacity of the line by approximately 50%. The Project will be implemented by the National Authority for Tunnels ("NAT"), a state-owned executive agency under the jurisdiction of the Ministry of Transportation. The line will be operated by the Egyptian Company for Metro ("ECM").

The Project is in line with the Bank's Strategy for Egypt, namely in its priorities to improve the quality and sustainability of public transport for Cairo City's growing population through promoting private sector participation and commercialization as well as green economy transition through financing the development of greener high-capacity public transport.

Transition Impact

ETI score: 70

The Project is a trigger investment under the EBRD's Green Cities Framework 2 ("GrCF2").

The GrCF2 represents a strategic and multi-project approach seeking to help identify and address environmental challenges in selected large cities in EBRD's countries of operation. The primary goal is to achieve significant environmental improvements and to promote the Green transition quality within the relevant cities. In addition to the environmental objective, the GrCF2 also promotes sustainable cities through inclusive, resilient, well-governed and smart urban development. These transition objectives are supported by the development and implementation of a city-specific Green City Action Plan ("GCAP") aiming to identify environmental challenges, facilitate better coordination and buy-in among stakeholders and help to prioritise and develop the best ways to address the environmental challenges through targeted investments, services and policy instruments.

The Project will help promote the Green transition quality through the upgrade, rehabilitation of an existing rail line, which will facilitate the shift from individual to sustainable, accessible and inclusive modes of public transport and contribute to significant reductions in GHG emissions. In addition, as a trigger investment for the GrCF2, the project will support the Governorate of Cairo to develop and implement a GCAP as well as to identify investment projects within the scope of Green Cities.

The Project will also support the Inclusive transition quality by introducing a component into the public procurement process, which in turn will encourage private sector contractors to open up on-site training programme opportunities for unemployed young people to enhance their skills and overall employability

Client Information

EGYPT SOVEREIGN

The Borrower is the Arab Republic of Egypt with the National Authority for Tunnels ("NAT") as the Implementing Agency.

EBRD Finance Summary

EUR 250,000,000.00

EBRD sovereign loan of EUR 250 million extended to the Arab Republic of Egypt, co-financed with the EIB and the GoE, for the benefit of NAT.

Total Project Cost

EUR 553,900,032.00

Additionality

Key sources of additionality are financing structure, risk mitigation, as well as knowledge, innovation and capacity building. The EBRD will assist the client in addressing environmental challenges through the development of a GCAP as well as supporting them in their efforts to decarbonise Cairo's highly congested transport system.

Environmental and Social Summary

Categorised B (2019 ESP). The Project is expected to result in significant Environmental, Health and Safety, and Social (EHSS) benefits through the improvement of the quality of transport services, its infrastructure, availability and reliability. Environmental and Social Due Diligence (ESDD) was undertaken by independent consultants, and confirmed that the EHSS risks associated with this project are readily identifiable and can be managed and mitigated through the implemented of a set of targeted measures. Mitigation measures have been compiled in an Environmental and Social Action Plan (ESAP) which is currently being discussed with the Client.  

Adverse EHSS risks identified are temporary and specific to the CML2 area and its direct surroundings. Key impacts include: labour, occupational health and safety associated with workers' activities and site management; sourcing and transport of ballast; waste management; noise, dust and air emissions and management of nuisance caused during the rehabilitation works; and stakeholder engagement. ESDD confirmed that all rehabilitation works will be undertaken within the footprint of the current line so no additional land acquisition is needed. New equipment will be in line in relevant EU standards, and current operational standards of the stations and rolling stock include provisions related to passengers safety and GBVH. This includes presence of CCTV and a special taskforce of policewomen patrolling the metro line.

The ESAP includes requirements for further enhancing the Occupational Health and Safety, Passengers and Community safety and Environmental and Social procedures to reach compliance with international standards and the PRs, and it is currently being negotiated with the Client.

A Non-Technical Summary and a Stakeholder Engagement Plan have been developed for the Project and will be disclosed on both EBRD's and NAT's websites.

The Project will be closely monitored by the Bank.

Technical Cooperation and Grant Financing

Technical cooperation is expected to include funding for elements relating to PIU support, supervision, development of the GCAP and inclusivity components. 

Company Contact Information

Ibrahim Bekheit
ibna_2004@hotmail.com
+20225742968
http://www.nat.org.eg/english/
Ramses Square, Ramses Complex Cairo, Arab Republic of Egypt, ZIP: 11794 p. B 466

PSD last updated

29 Oct 2021

Understanding Transition

Further information regarding the EBRD’s approach to measuring transition impact is available here.

Business opportunities

For business opportunities or procurement, contact the client company.

For business opportunities with EBRD (not related to procurement) contact:

Tel: +44 20 7338 7168
Email: projectenquiries@ebrd.com

For state-sector projects, visit EBRD Procurement:

Tel: +44 20 7338 6794
Email: procurement@ebrd.com

General enquiries

Specific enquiries can be made using the EBRD Enquiries form.

Environmental and Social Policy (ESP)

The ESP and the associated Performance Requirements (PRs) set out the ways in which the EBRD implements its commitment to promoting “environmentally sound and sustainable development”.  The ESP and the PRs include specific provisions for clients to comply with the applicable requirements of national laws on public information and consultation as well as to establish a grievance mechanism to receive and facilitate resolution of stakeholders’ concerns and grievances, in particular, about environmental and social performance of the client and the project. Proportionate to the nature and scale of a project’s environmental and social risks and impacts, the EBRD additionally requires its clients to disclose information, as appropriate, about the risks and impacts arising from projects or to undertake meaningful consultation with stakeholders and consider and respond to their feedback.

More information on the EBRD’s practices in this regard is set out in the ESP.

Integrity and Compliance

The EBRD's Office of the Chief Compliance Officer (OCCO) promotes good governance and ensures that the highest standards of integrity are applied to all activities of the Bank in accordance with international best practice. Integrity due diligence is conducted on all Bank clients to ensure that projects do not present unacceptable integrity or reputational risks to the Bank. The Bank believes that identifying and resolving issues at the project assessment approval stages is the most effective means of ensuring the integrity of Bank transactions. OCCO plays a key role in these protective efforts, and also helps to monitor integrity risks in projects post-investment.

OCCO is also responsible for investigating allegations of fraud, corruption and misconduct in EBRD-financed projects. Anyone, both within or outside the Bank, who suspects fraud or corruption should submit a written report to the Chief Compliance Officer by email to compliance@ebrd.com. All matters reported will be handled by OCCO for follow-up. All reports, including anonymous ones, will be reviewed. Reports can be made in any language of the Bank or of the Bank's countries of operation. The information provided must be made in good faith.

Access to Information Policy (AIP)

The AIP sets out how the EBRD discloses information and consults with its stakeholders so as to promote better awareness and understanding of its strategies, policies and operations following its entry into force on 1 January 2020. Please visit the Access to Information Policy page to find out what information is available from the EBRD website.

Specific requests for information can be made using the EBRD Enquiries form.

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.

Please visit the Independent Project Accountability Mechanism webpage to find out more about IPAM and its mandate; how to submit a Request for review; or contact IPAM  via email ipam@ebrd.com to get guidance and more information on IPAM and how to submit a request.

 

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