North Loop Efficiency Project

Location:

Lebanon

Project number:

50505

Business sector:

Energy

Notice type:

Public

Environmental category:

B

Target board date:

27 Nov 2019

Status:

Passed Final Review, Pending Board Approval

PSD disclosed:

23 Sep 2019

Translated version of this PSD: Arabic

Project Description

Provision of a sovereign loan to the Republic of Lebanon to assist the Ministry of Energy and Water ("MoEW") and the state-owned utility Electricite du Liban ("EdL") in reinforcing and upgrading Lebanon's electricity transmission network.

Project Objectives

The proceeds of the Bank's loan will be used to finance capital expenditures to upgrade and reinforce electricity grid in the north of Beirut including new substations and underground cables. The Project will contribute to the reinforcement of the electricity grid in anticipation of the additional electricity generation capacity to be added in the next few years and therefore improve the electricity sector's sustainability.

Transition Impact

Good.

The Project will contribute to the Green and Well-Governed transition qualities through a combination of capex investment and technical cooperation. It is expected to lead to significant improvements in the environmental performance and reliability of Lebanon's electricity transmission network; as well as support the sector's overall sustainability through enhancements in EdL's procurement integrity, financial transparency, and environmental and social standards.

Client Information

ELECTRICITE DU LIBAN

The Republic of Lebanon

The Ministry of Energy and Water

Electricite du Liban ("EdL")

EdL is a 100% state-owned central entity in the Lebanese electricity system responsible for the generation and transmission of electricity in Lebanon.

EBRD Finance Summary

USD 80,000,000.00

Up to USD 80.0 million sovereign loan to the Republic of Lebanon. The Project will be co-financed with an investment grant of USD 7.3 million that will contribute towards the financing of the overall Project costs.

Total Project Cost

USD 87,300,000.00

Up to USD 87.3 million of the proceeds will be applied to finance the construction of new substations and underground cables.

Environmental and Social Summary

Categorised B (2014 ESP).  The Project is expected to result in social and environmental benefits including provision of a more robust and reliable electricity distribution network; reduced distribution losses and associated CO2 reductions; and additional network capacity for the distribution of electricity from renewable energy sources. Ongoing independent environmental and social (E&S) due diligence has shown that potential E&S impacts associated with the Project are largely restricted to the construction phase and are of limited duration.  An E&S action plan will be agreed with the Client to align the Project with the Bank's E&S requirements.

The Project involves the establishment of three new 220kV substations in northern Beirut, which will be linked by 220kV underground cables.  Two of the substations will be constructed at existing substation sites while the third will be established on a state owned land plot. Each substation will require permitting EIAs.  Construction works will be associated with typical noise, dust, construction waste and traffic related impacts which can be addressed through standard mitigation measures and will be of limited duration.  Once operational, substations are not expected to result in significant impacts. In some areas operational noise may be an issue and mitigation measures may be required.  A noise assessment will be conducted as part of the permitting process and monitoring will be undertaken.  Significant electromagnetic field impacts are not expected.

One substation site is currently used as new and redundant transformer storage facility.  Surface contamination through transformer oil, some of which is expected to contain polychlorinated biphenyls (PCBs), was identified. Such contamination will need to be investigated and remediation measures implemented, if deemed necessary, prior to construction works.  Disposal of PCBs and contaminated soil is expected to require export as Lebanon does not have its own hazardous waste treatment and disposal facilities.  Export of hazardous waste is managed by the Ministry of Environment in compliance with the Basel Convention (on the control of transboundary movements of hazardous wastes and their disposal).

Underground cables will be installed within existing road reserves and no land acquisition is required.  The installation of underground lines will cause some disruption to traffic. To reduce this, installation will take place outside of the peak summer season and will avoid peak traffic times.  Installation progress is generally rapid.  Installation works have the potential to intersect unmapped utilities or unknown cultural heritage.  Such occurrences may require minor rerouting but this will be informed by the relevant authorities.

Appropriate E&S management provisions  will need to be put in place for the Project. Strict E&S, including labour, management requirements will apply to all contractors with supervision provided by the owner's engineer.  This will include the development of E&S management plans and procedures.  Operational E&S management provisions will also need to be established to ensure that health safety risks are appropriately managed. This will be captured in the E&S action plan.

The Bank's consultant is developing a stakeholder engagement plan and non-technical summary to guide and ensure early stakeholder engagement on the Project and provide a mechanism to receive and respond to stakeholder concerns. When available, these documents will be disclosed by the Bank with the PSD. Municipalities will also conduct information campaigns prior to cable installation works. 

Technical Cooperation

Technical assistance will be provided for the purposes of:

1) Environmental and Social Due Diligence - an Environmental and Social Assessment of the Project was carried out by an external consultant to provide recommendations for environmental, health and safety, and social management of EdL and agreeing on an ESAP.

2) Advance Procurement Support - the assistance aims at supporting the preparation of tender documents based on EBRD's templates for the contracts under the Project, preparation of the tender evaluation reports, and preparation of draft Contract Agreements by using EBRD's standard templates in accordance with the requirements of the Bank's Procurement Polices and Rules (PP&R) for public sector operation.

3) Financial Reporting - the assistance targets improvements in EdL's financial transparency by supporting the company in adopting International Financial Reporting Standards.

4) Corporate Governance and Compliance - the assistance aims to support the implementation of anti-corruption measures to enhance EdL's corporate governance functions.

5) Project Implementation Unit - the assistance aims at establishing a consultancy support to assist MoEW and EDL in the implementation of the Project and ESAP monitoring.

Company Contact Information

Zakaria Rammal
zarammal@gmail.com
+961 3 732 968

Business opportunities

For business opportunities or procurement, contact the client company.

For state-sector projects, visit EBRD Procurement: Tel: +44 20 7338 6794
Email: procurement@ebrd.com

General enquiries

EBRD project enquiries not related to procurement:
Tel: +44 20 7338 7168
Email: projectenquiries@ebrd.com

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Text of the PIP

Project Complaint Mechanism (PCM)

The Project Complaint Mechanism (PCM) is the EBRD's accountability mechanism. It provides an opportunity for an independent review of complaints from individuals and organisations concerning EBRD-financed projects which are alleged to have caused, or are likely to cause, environmental and/or social harm.

Please visit the Project Complaint Mechanism page to find information about how to submit a complaint. The PCM Officer (pcm@ebrd.com) is available to answer any questions you may have regarding the submission of a complaint and criteria for registration and eligibility, in accordance with the PCM Rules of Procedure.