NEPCO Northern Green Substation

Location:

Jordan

Project number:

53334

Business sector:

Energy

Notice type:

State

Environmental category:

B

Approval date:

15 Dec 2022

Status:

Passed Final Review, Pending Approval

PSD disclosed:

31 Aug 2022

Project Description

Provision of a sovereign guaranteed loan to the National Electric Power Company (NEPCO) to finance the construction of a 400kV high voltage transmission substation in the North-Eastern part of Jordan, which will help in improving the grid's capacity to absorb existing and new renewable energy projects.

Project Objectives

The proceeds of the Bank's loan will be used by NEPCO to finance a 400kV substation to help (i) improve the absorption capacity of existing and planned renewable energy projects, (ii) increased dispatching flexibility, (iii) reinforce the North-Eastern high voltage electricity network; and (iv) facilitate network interconnection to neighbouring countries.

Transition Impact

ETI score: 74

The Project will contribute to the Green and Inclusive transition qualities through a combination of capital investments and technical cooperation. Specifically, the Project will:

1)     Promote the use of renewable energy sources, strengthen energy security through diversification of energy supplies and energy market integration;

2)     Support NEPCO's Electrical Training Centre through the development of a 'green skills' training program to improve access to market- relevant skills and employment opportunities for young people;

3)     Enhance access to skills and employment in Jordan by improving policy practices on apprenticeship arrangements; and

4)     Support NEPCO's management at all levels in the implementation of best practices on equal opportunities, including fair hiring, performance evaluations and job promotions.

 

Client Information

NATIONAL ELECTRIC POWER COMPANY

JORDAN SOVEREIGN i National Electric Power Company (NEPCO) guaranteed by the Hashemite Kingdom of Jordan.

NEPCO is a 100% state-owned central entity in the Jordanian electricity system acting as transmission system owner and operator, dispatcher, single wholesale buyer of electricity and single buyer of fuel and natural gas for conventional generation.

EBRD Finance Summary

USD 45,000,000.00

Up to USD 45 million sovereign guaranteed loan to NEPCO. The Project is expected to be co-financed with an investment grant of EUR 4.4 million (USD 4.4 million equivalent) made available by other partners that will contribute towards the financing of the overall Project costs.

Total Project Cost

USD 49,413,860.00

Environmental and Social Summary

Categorised B under the 2019 Environmental and Social Policy (ESP) and High-Medium risk. The Project is Medium-High risk due to the potential land use and biodiversity impacts linked with the high voltage power lines, considered as an Associated Facility to the Project. While the substation is not located in an environmentally or socially sensitive area, the exact routing of the high voltage lines are not yet defined.

Key Environmental & Social (E&S) impacts associated with the Project and the power lines include: Occupational Health and Safety, land acquisition and compensation, biodiversity, contractor management and stakeholder engagement. The E&S Due Diligence is currently underway by an independent consultant, and will include a visit to the substation site and approximate route of the overhead transmission line, as well as meetings with NEPCO's representatives.

A thorough independent Environmental and Social Due Diligence (ESDD) was undertaken on NEPCO in 2018 in the context of the NEPCO Restructuring Loan (Op ID 50034), which included a corporate audit.

The corporate audit will be updated during this Project's ESDD, and any additional gaps identified against EBRD's 2019 ESP will be addressed via an updated E&S Action Plan (ESAP). The ESAP will also include actions to limit the impacts of the associated infrastructure (power lines).

A Resettlement Framework, Non-Technical Summary and a Stakeholder Engagement Plan will be developed and published on EBRD's website prior to the Final Review Memorandum (FRM) submission. The project is deemed not significantly exposed to Physical Climate (PC) risks (PC score of 1) and is considered Paris aligned. This Public Summary Document (PSD) will be updated once ESDD is completed.

Technical Cooperation and Grant Financing

Technical assistance will be provided to the company for the purposes of:

1)     Environmental and Social Due Diligence - an Environmental and Social Assessment of the Company and Project will be carried out by an external consultant with the aim of providing recommendations for environmental, health and safety, and social management of the Company, confirming the categorisation of the Project and agreeing on an ESAP.

2)     Technical Due Diligence - The assignment aims to assess existing local electricity transmission system for integration of newly proposed substation and key technical interfaces for operability of the newly proposed substation as well as review transmission grid performance, Greenhouse Gas (GHG) emissions, permits & consents, proposed technology and operational requirements of the proposed substation.

3)     Green Skills Training for Electrical Technicians - The assistance aims to support NEPCO's Electrical Training Centre through the development of a 'green skills' training program to enable NEPCO's Electrical Training Centre to offer a new technical training for target groups on use of renewable energy sources on the company's grid.

4)     Policy Dialogue on Apprenticeship Scheme - The policy dialogue initiative will build on the previous engagements with NEPCO under the VISP - NEPCO: Liquidity facility (Op ID 52010) to support the design of a national apprenticeship framework that will include a regulatory framework to be presented to the Technical and Vocational Skills Development Commission (TVSDC).

5)     Implementation of Best Practices on Equal Opportunities - The assistance will support NEPCO's management at all levels in the implementation of best practices on equal opportunities, including fair hiring, performance evaluations and job promotions.

6)     FIDIC Consultant - the assistance includes the appointment of a FIDIC Engineer who will work with NEPCO to ensure that during the construction stage work is carried out in accordance with the quality required by the contract, within the stipulated time and at the correct price.

7)     Energy and Mineral Resources Commission (EMRC) Capacity Building for Green Transition in Jordan - The assistance aims to support EMRC's mandate pertaining to electricity system efficiency, transparency, and decarbonisation; with an emphasis on the auditing of Distribution System Operator (DSO) and Independent Power Producers (IPP) licensees and overall investment planning in line with non-discriminatory and least-cost principles.

Company Contact Information

Ghaith Assamak
assamakg@ebrd.com

Implementation summary


PSD last updated

31 Aug 2022

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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