Provision of a senior secured loan of up to USD 4,830,000 to Intro Sustainable Resources & Intro Solar S.A.E. (the "Borrowers") to finance a pipeline of green projects the most advanced of which includes the expansion of a plastic bottle recycling facility, replacing an inefficient diesel steam energy generation with combined heat and power plant ("CHP"), and refinancing a solar project developed under round 1 of the Egyptian Feed-in-tariff ("FiT") program (the "Projects").
The Projects will support: i) the company's expansion of resource recovery facilities; ii) its ambitions to expand its long-term low-carbon energy transition strategy; and iii) the expansion of private-to-private utility projects in Egypt.
ETI score: 66
The Transition Impact arises from the Green and Inclusive qualities:
Green - The Projects entail the financing of green projects, specifically the production capacity expansion of a plastic bottle recycling facility, the replacement of inefficient diesel steam energy generation units for a food-processing company with a best-of-class industrial use CHP plant, the refinancing of the solar project, and other investments. Excluding the refinancing, other components of the project will result in GHG emissions savings and higher energy efficiency. The preliminary Green Economy Transition ("GET") share of the use of proceeds is 93% with the potential to increase following add-on investments.
Competitive i The Projects will be developed on a private to private basis, which will increase the role of private developers in an electricity market that to date is largely dominated and catered to by the public sector. The recycled PET facility will demonstrate how private sector driven industrial waste recycling projects can be economically viable.
INTRO SUSTAINABLE RESOURCES
Intro Sustainable Resource was recently established in 2020 to develop alternative energy, energy efficiency, waste management, RDF, material recovery and recycling projects via two fully owned subsidiaries: (i) Intro Power & Utilities, and (ii) Intro Waste Management and Material Recovery. Intro Sustainable Resources is ultimately 100% owned by Intro Investments Holding Ltd.
Intro Solar is an Egyptian-domiciled SPV operating a 5 MW solar PV plant developed under round 1 of the FiT program. Intro Solar is currently 75% owned by the Abbas family through their 100% owned entity, Intro Storage LLP.
EBRD Finance Summary
Total Project Cost
Financing structure - USD financing from commercial banks is limited in Egypt and EBRD offers financing that is not available in the market from commercial sources on reasonable terms and conditions.
Environmental and Social Summary
Categorised B (2014 ESP). The Bank's confirmed use of proceeds, refinancing an existing 5MW PV plant, a small scale gas fired CHP plant at a commercial food production facility and the installation of equipment to increase the capacity of a plastic bottle recycling plant, are expected to result in reduced and avoided GHG emissions and a reduction in plastic waste through recycling. A future pipeline of projects, which includes renewable energy (RE), electricity distribution, alternative energy applications and waste management projects are further expected to reduce GHG emissions. Despite the benefits of these projects, the development and operation thereof may be associated with various E&S impacts, although these have been assessed to be limited and readily managed through mitigation measures. An Environmental and Social Action Plan ("ESAP") has been developed and will be agreed with the Company before Board.
E&S due diligence (ESDD) was conducted by a consultant with support from ESD and included a review of Company E&S management provisions and capacity, existing Company assets as well as potential E&S risks associated with individual projects, both defined and future projects. The ESDD also included the development of a procedure for the Company to guide the identification and assessment of impacts and the management, monitoring and reporting of future projects in line with EBRD's E&S requirements. Future projects are expected to be category B and will require sign off by EBRD. While E&S provisions have been included in projects developed to date, the Company will be required to formalise its own E&S management system and cascade this down to individual projects. This will include the need for adequate E&S resources, contractor E&S requirements, management plans, procedures and monitoring provisions. The procedure developed as part of the ESDD will complement the management system. Further provisions will be required to consider and mitigate risks in supply chains, specifically potential forced labour risks in future solar PV projects
E&S impacts associated with the use of proceeds are assessed to be limited as these will take place within the boundaries of existing commercial sites and will have a limited footprint. Projects will be required to undergo appropriate E&S assessments and permitting where required. HR provisions comply with national labour law and are generally aligned with PR2 requirements although the Company will need to develop a formal HR policy and grievance mechanism and apply such provisions to contractors. The CHP plant will be required to meet the emission limits of the EU Medium Combustion Plant directive. Provisions will be put in place to manage potential issues associated with water use and waste generation. Further provisions are required to ensure potential H&S risks associated with the projects are suitably assessed and managed including risks to workers, off takers and communities. This will include fire and building safety and emergency preparedness and response planning. The ESDD included consideration of potential risks at existing projects, and existing and planned off takers, and the ESAP includes actions for the Company address such risks, and liaise with off takers where necessary. These include health and safety and waste management, including waste supply chains, risks. No land acquisition, biodiversity or cultural heritage issues have been identified. Future projects may be associated with such issues and these will need to be considered as part of the respective assessments. A stakeholder engagement framework has been developed for the project as has a Non-Technical Summary (to be disclosed with the PSD). The framework will serve as the basis for project specific Stakeholder Engagement Plans (SEPs) to ensure information disclosure, stakeholder engagement and a grievance mechanism.
Technical Cooperation and Grant Financing
Company Contact Information
Omar El Maarry
2 Wadi El Nile st., Mohandiseen, Giza, Egypt
PSD last updated
17 Feb 2022
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