Provision of a sovereign loan of up to EUR 15 million to the Hashemite Kingdom of Jordan to finance the construction of a new wastewater treatment plant (WWTP) in West Irbid. The loan is envisaged to be co-financed by i) an investment grant of EUR 8 million from the UK's High Impact Partnership for Climate Action (HIPCA) and ii) an investment grant of EUR 3 million from the EBRD's Shareholder Special Fund (SSF).
The new and modern WWTP is part of a system design improvement under the EBRD-funded West Irbid wastewater project, which is expected to reduce the energy and carbon footprint of the project (to be confirmed during due diligence), and reduce operational and maintenance costs. The WWTP will be located in West Irbid in an area (which is subject to environmental and social due diligence by the EBRD), with a lower altitude relative to the sewage networks which allows for wastewater to be conveyed by gravity instead of energy-intensive pumping stations. This will significantly enhance the sustainability of the wastewater system by rationalising the need for pumping stations, in addition to alleviating pressure on the existing WWTP in the area (Wadi Al-Arab) which is nearing capacity. The treated final effluent from the new WWTP will be re-used downstream with the potential for the by-product (wastewater sludge) to be also utilised (subject to its technical and economic feasibility).
ETI score: 68
The primary transaction quality is Green given that the new WWTP is expected to enhance the sustainability of the wastewater system by reducing the need for pumping stations, in addition to alleviating pressure on the existing WWTP in the area (Wadi Al-Arab). The secondary transaction quality is Inclusive as the project is expected to enhance employment prospects and build the skills of young people through providing replicable and nationally accredited training programmes.
EBRD Finance Summary
Total Project Cost
The project is expected be co-financed by investment grants from the UK's HIPCA facility (EUR 8 million) and the EBRD's SSF (EUR 3 million).
EBRD offers a tenor, which is above the market average and is necessary to structure the project as well as providing expertise and international procurement and environmental and social best practice.
Environmental and Social Summary
Categorised B (2019 ESP). The project involves the development of a greenfield wastewater treatment plant (WWTP) in support of an existing Bank project that will provide first time wastewater network connections to households in West Irbid. This project initially included treatment of wastewater at the existing Wadi Al-Arab WWTP. During the implementation phase, however, it was determined that establishing a new WWTP would result in various benefits. These include alleviating pressure on the Wadi Al-Arab WWTP, which is close to capacity as well as removing the need for numerous pump stations, instead utilising gravity for wastewater transfer thus reducing energy demand. The proposed WWTP is below the EBRD capacity threshold of 150,000 population equivalent for WWTPs and has been categorised B.
Independent E&S DD is currently in progress as part of a detailed feasibility study. The ESDD includes an assessment of impacts which will be subject to further analysis as part of a formal EIA process for permitting purposes post-signing. EBRD will support this assessment process through a technical corporation assignment. The ESDD includes developed on an ESAP to structure the Project in line with the Bank's requirements. This will include the development of various E&S management plans and procedures, including with respect to labour matters.
The WWTP will treat wastewater to EU standards. While located near to a wadi, the project will discharge treated wastewater into an existing pipeline, which discharges to an irrigation reservoir. Two water wells are located near to the site, the nearest at 50 meters. The ESDD is considering potential risks to such resources but the WWTP design will nevertheless include measures to avoid (and contain) any potential pollution and contamination risks. Sludge management and disposal/re-use is currently being considered as part of the feasibility study and the ESDD.
The proposed WWTP location, which was initially considered for a pumping station, is not within any protected areas or would affect any sensitive biodiversity. The WWTP will be located on private land which is partly used for agriculture and would impact a dwelling (although not inhabited). The potential for formal expropriation exists and the ESDD is currently updating the existing land acquisition framework to include the WWTP. Initial indications are that land acquisition will not result in significant impacts but this will be confirmed by the ESDD. Land owners and users will be compensated for their land, including assets on such land, and livelihoods restored. Agricultural dwellings and activities are located nearby to the WWTP location but a sufficient distance away to avoid nuisance impacts such as noise and odour. Saydour town is nearby. The WWTP will incorporate measures to reduce such impacts as well as impacts associated with construction, such as dust. The WWTP will be connected to the planned West Irbid network and measures will be put in place to avoid impacts during the installation of pipelines, including to land owners.
The ESDD will update the existing Stakeholder Engagement Plan (SEP) to include the WWTP and this will be disclosed together with an updated Non-technical Summary. This PSD will be updated when the ESDD is complete.
Technical Cooperation and Grant Financing
A. Technical Cooperation (TCs):
Comprehensive feasibility study including Environmental and Social Due Diligence (ESDD), procurement support and construction supervision.
B. Co-investment grants / Concessional Finance (Non-TC)
- EUR 3.0 million investment grant (to be provided by the SSF); and
- EUR 8.0 million investment grant (approved by HIPCA).
The grant co-financing is needed to provide the necessary technical assistance for the implementation of this critical infrastructure project, in addition to enhancing the capacity of the client during the implementation of the project. The capex grants will also mitigate affordability concerns in light of challenges in achieving cost recovery. Therefore, the grants associated with the project are crucial to allow for the delivery of critical infrastructure assets and services in this sector. The provision of the grant co-financing is expected to be accompanied by technical assistance and/or policy engagement to improve cost recovery ratios.
Company Contact Information
+962 6 5652265
K. Hussein St. 34, Amman, Jordan
PSD last updated
26 Sep 2022
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