GrCF2W2 - Alexandria Metro

Location:

Egypt

Project number:

49905

Business sector:

Municipal and environmental infrastructure

Notice type:

State

Environmental category:

A

Approval date:

10 Nov 2021

Status:

Passed Final Review, Pending Approval

PSD disclosed:

28 Jul 2021

Project Description

Provision of a sovereign loan of up to EUR 250 million to the Arab Republic of Egypt to finance the upgrade and electrification of an existing rail line connecting downtown Alexandria and north-eastern town Abou Qir ("Abou Qir line") into a high capacity metro system (the "Project").

Project Objectives

The EBRD loan will finance (i) infrastructure works for the upgrade and the electrification of the line, (ii) relevant rail systems, including the upgrade of signalling, telecommunications and centralised control systems, and (iii) rolling stock to be operated on the new metro system.

The Project is part of an overall investment package estimated at EUR 1.6 billion expected to be co-financed by the European Investment Bank, the Agence Francaise de Developpment and the Asian Infrastructure Investment Bank.

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 is expected to use the corridor of an existing railway line currently operated by the Egyptian National Railways ("ENR"), while the operation of the future metro line is intended to be awarded to an independent metro operator.

The Project is in line with the Bank's Strategy for Egypt, namely with its priorities to improve quality and sustainability of the Country's municipal infrastructure services through promoting private sector participation and commercialisation as well as green economy transition through financing the development of a greener high-capacity public transport.

Transition Impact

ETI score: null

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 to promote the Green transition quality through upgrade and electrification of an existing rail line and, thereby, facilitate shift from individual to sustainable, accessible and inclusive modes of public transport and contribute to significant reduction in GHG and air pollution emissions. In addition, as a trigger investment for the GrCF2, the Project will support the Governorate of Alexandria 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 Well-governed objective through the introduction of a long-term contract with an experienced metro operator following the Project completion, which will support private sector involvement in urban transport service provision, contribute to the commercialisation of the sector and is expected to a have strong demonstration effect.

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 other International Financial Institutions ("IFIs"), for the benefit of the National Authority for Tunnels ("NAT").

Total Project Cost

EUR 1,615,699,968.00

Additionality

Key sources of additionality are financing structure, risk mitigation, as well as knowledge, innovation, and capacity building.

The EBRD stands ready to help the Client to move along a low carbon transition pathway. The EBRD will provide expertise, innovation, knowledge and capabilities that are material to the timely realisation of the Project objectives.

Environmental and Social Summary

Categorised A (2014 ESP).  The Project involves the upgrade and electrification of the 22km existing rail line connecting downtown Alexandria (Misr Station in the west) and the north-eastern town Abu Qir into the first high capacity metro system in this coastal city. This will result in a number of environmental and social (E&S) benefits, including: increased safety and reliability of the public rail service, removal of level-crossings and thus eliminating collision risks, jobs creation and reduced GHG emissions. The Project is expected to result in an average savings of 21,930 tonnes of CO2 per annum due to the modal shift of road vehicles and the diesel train to the electrified metro system. While the Project is expected to result in E&S benefits, it is significant linear infrastructure in an urban environment and its construction and operation has the potential to be associated with significant E&S impacts, including impacts related to physical and economic displacement.  The Project has therefore been categorised A, requiring a comprehensive and participatory ESIA and disclosure thereof for 120 days. An ESIA disclosure package has been developed in accordance with the EBRD Performance Requirements (PRs) and other co-lender E&S standards and, following independent review, has been publically disclosed in English and Arabic in line with the Bank's Directive on Access to Information.

The EISA disclosure package includes the following:

  • an Environmental and Social Impact Assessment Report (ESIA), including E&S Management Plans (ESMPs);
  • a Non-Technical Summary (NTS);
  • a Resettlement Framework (RF);
  • a Stakeholder Engagement Plan (SEP); and
  • a draft E&S Action Plan (ESAP)

The alignment of the Project is within the current railway corridor, owned by ENR and it is anticipated that all construction works will take place on ENR's land, except for additional land needed for a depot and the new stations at Bab Sharq and Sporting. A ministerial decision was issued in 2020 transferring the ownership of land required to develop the Project to NAT, excluding the lands for Bab Sharq and Sporting stations as the final designs have not been developed yet and the exact locations are not yet finalised. The area required for the depot is owned by the AlNahass Company, where decommissioned copper factories are located. The transfer of ownership from AlNahass to NAT is based on a willing buyer i willing seller transaction.

The Project, as currently proposed, consists of an elevated viaduct from Toson to AlZahiria (13 elevated stations) and 8 at-grade stations from Abu Qir to Toson and from Kafr Abdou to Misr stations. The proposed design was suggested based on an effort to minimise to the extent possible physical and economical resettlement, while maintaining traffic flow and technical and cost considerations.

A Resettlement Framework (RF) and associated Guide to Land Acquisition and Compensation has been developed to inform mitigation, compensation and livelihood restoration measures in line with national law and lender requirements. Detailed compensation, assistance and livelihood restoration measures will be developed once the final design is completed and will be included in a detailed Resettlement Action Plan (RAP) that will be disclosed publicly, including on EBRD's website. The implementation of the RAP will be verified through internal and external monitoring activities and a RAP completion audit.

The Project will be fenced along its entire alignment and all crossings will pass either under or over the metro line, which provides significant mitigation of current community health and safety impacts. An occupational health and safety plan will be developed for the construction and operation phases.

Noise and vibration impacts have the potential to be significant in certain locations during construction and operation and will be managed in line with the national and international standards and with good practice mitigation measures such as noise barriers and restriction on working times, which is included in the Environmental and Social Management Plans ("ESMPs") and ESAP.

The Project does not cross, and is not close to any key biodiversity areas or areas with ecological value. Asbestos has been found in the proposed ElNahass depot land, and measures to adequately manage and dispose of asbestos containing material have been added to the ESAP.

As Alexandria is an ancient and culturally-rich city, the potential for archaeological findings is high during excavation works along the existing line to erect the viaducts. The Ministry of Antiquities has already been consulted and further coordination will take place prior to Project mobilisation. A chance find procedure and training of personnel will be undertaken prior to construction commencing.

A set of ESMPs have been prepared including mitigation measures and roles and responsibilities between NAT, its contractors and the line operator. The ESMPs also establish a defined process for managing any Project changes during the detailed design. The EPC Contractor will further detail the ESMPs to implement the mitigation measures identified as part of ESIA in line with lender requirements. NAT and any project contractors are required to manage potential impacts to workers and communities through the development of a number of policies and procedures that include code of conduct, child and forced labour, Gender Based Violence and Harassment (GBVH), wages and benefits, occupational and community health and safety, etc. The Project will establish and implement an internal grievance mechanism in line with the Bank requirements.

A draft ESAP has been developed and agreed with NAT and will be finalised following the ESIA disclosure period. The Project will be monitored regularly by independent E&S consultants to ensure compliance with the ESAP and lender requirements, while the final design and construction will be reviewed by an independent technical consultant to verify compliance with the required environmental, safety and technical standards.

A SEP has been prepared defining stakeholder engagement and information disclosure activities during the Project lifecycle, including during ESIA disclosure. The SEP will be updated as required as the Project progresses.  A Project grievance mechanism has been established for external stakeholders, including the public, to raise concerns, comments and questions about Project. 

Technical Cooperation and Grant Financing

Post-signing TCs:

TC 1: Lender Supervisory Services to monitor and report on the effective implementation and completion of the Project. The estimated cost of the assignment is up to EUR 600,000, proposed to be financed by an international donor or the EBRD's Special Shareholder Fund (SSF).

TC 2: Preparation and Award of Operational Contract for the New Metro System to support NAT in the introduction of a long-term maintenance and operational contract with an experienced metro operator. The estimated cost of the assignment is up to EUR 300,000, proposed to be financed by an international donor or the SSF.

TC 3: Environmental and Social Action Plan ("ESAP") Implementation Support to assist NAT in developing and improving its Environmental, Health and Safety performance to meet the Bank's Environmental and Social Policy as well as the ESAP requirements. The estimated cost of the assignment is up to EUR 300,000, proposed to be financed by an international donor or the SSF.

TC 4: Green City Action Plan ("GCAP") to support the Governorate of Alexandria to identify and prioritise its most pressing environmental challenges and develop a plan for investments to pursue the green agenda. The estimated cost of the assignment is up to EUR 350,000, proposed to be financed by Austria - EBRD City REgenerATion and Environment (CREATE) Fund Programme Account.

Company Contact Information

Ibrahim Bekheit
ibna_2004@hotmail.com
+20 2 25742968
http://www.nat.org.eg/english/
Ramses Square, Ramses Complex Cairo, Arab Republic of Egypt, ZIP: 11794 p. B 466

Implementation summary


PSD last updated

29 Jul 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

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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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