Alexandria Refinery Green Project

Location:

Egypt

Project number:

51018

Business sector:

Natural resources

Notice type:

State

Environmental category:

B

Approval date:

29 Sep 2021

Status:

Passed Final Review, Pending Approval

PSD disclosed:

06 Oct 2020

Project Description

Provision of up to USD 250 million sovereign loan to Alexandria Petroleum Company (APC) to exclusively finance a package of energy and water efficiency investments to modernize and upgrade the refinery with processes capable of producing higher value added products, improving the energy efficiency and the overall performance, as well as reducing the environmental impacts.

The Project will install a number of Resources and Energy efficiency investments (namely Energy Management System, Cooling Water Tower, Emissions Monitoring System), pollution and emissions reduction investments, in addition to implementing an Energy & Water Efficiency Investment Programme (EWEIP) from implementing a Waste Water Treatment as well as other modernization investments.

 

Project Objectives

The Project aims to improve the refinery's efficiency, reduce its energy consumption and overall environmental impact while enhancing the plant productivity from (i) saving emissions of greenhouse gas (GHG) from increasing the refinery's output of higher quality and lower sulphur fuels in line with Euro 5 standards in addition to installing a Continuous Emissions Monitoring System (CEMS); (ii)Reducing the fuel consumption through the installation of Energy Management System (EMS) and a Vapour Recovery Unit (VRU) among other Energy efficiency investments; and (iii) Decreasing the seawater pollution risk and reducing the water usage through the installation of a Waste Water Treatment using Best Available Technology (BAT).

Transition Impact

ETI score: 60

The sources of Transition Impact qualities for the Project consist of: (i) Competitive and (ii) Green. The Project will enable the Bank to put energy efficiency at the heart of the strategy of the refining sector in Egypt and further enhance its policy dialogue initiatives, in particular in the context of the Oil & Gas Modernisation Programme launched by Egyptian Ministry of Petroleum.

Client Information

EGYPT SOVEREIGN

The loan will be provided on a sovereign basis to the Arab Republic of Egypt. The ultimate beneficiary will be APC.

EBRD Finance Summary

USD 250,000,000.00

Total Project Cost

USD 647,000,000.00

Additionality

EBRD offers financing terms and conditions that are not available in the market from commercial sources. The bank's investment is needed to close the funding gap in the market in terms of hard currency (USD). The client seeks EBRD's expertise on higher enviromental and best international procurement standards.

Environmental and Social Summary

Categorised B (2014 ESP). The Project is part of a Programme of investments to improve environmental performance of the Alexandria refinery and produce better quality (Euro 5) diesel. The Project includes energy and resource efficiency investments leading to a reduction in greenhouse gas emissions, better quality wastewater, reduced water demand through recycling, vapour recovery and significantly reduce seawater use for cooling. Independent environmental and social due diligence (ESDD)  is currently ongoing and is considering the potential E&S risks and impacts of the Project and overall Programme, the E&S benefits, alignment of the refinery with EU standards (EU Best Available Techniques - BAT) and the PRs and the capacity of the Company to implement the Programme and operate the refinery in line with the PRs. 

The investment Programme has been designed in line with BAT EU BAT for sector. Early due diligence findings indicate the Project and Programme are expected to result in substantial improvements. Sulphur reduction both at the refinery and through the use of better quality diesel is a key benefit, as is reduced water demand and improved wastewater treatment. Overall GHG emissions (scope 1 and 2) are expected to be slightly less than current emissions, and less than a future scenario with the import of Euro 5 diesel. Impacts associated with the implementation of the Project are expected to be limited and readily addressed as works are expected to take place within the refinery boundaries using experienced contractors. Key considerations will include the management of occupation health and safety and labour management. Specific management plans will need to be put in place with refinery oversight. In addition to the Programme and the Bank's Project, due diligence has identified some areas to align the overall refinery with EU BAT. This includes in relation to storage tanks and associated secondary containment, emissions and emission monitoring. The Project includes the installation of a continuous emissions monitoring system (CEMS) and a burner management system. Once the systems are in place, the refinery will need to review its emissions against EU BAT emission limits and where reductions are need implement the necessary abatement measures. The new vapour recovery unit will result in reduced flaring. The refinery is also being reviewed in terms of occupation and industrial safety provisions, specifically the EU Seveso III Directive and the ATEX Directive. The due diligence has identified some areas for improvement including implementing the recommendations of existing quantitative risk assessments (QRAs) as well as updating the QRAs to consider the Programme and some additional scenarios. This may require updates to emergency preparedness and response plans. Some other occupational health and safety improvements have also been identified. The due diligence includes the development of a Non-Technical Summary (NTS) and a Stakeholder Engagement Plan (SEP). These will be made available in English and in Arabic. To meet Seveso III requirements the refinery will need to engage with stakeholders on industrial safety risks associated with the refinery. This is important considering the location of the refinery in an urban area.

An E&S action plan will agreed with the Company before Board to align the refinery with the Bank's requirements.

This PSD will be updated once the E&S due diligence is complete.

Technical Cooperation and Grant Financing

TC funds consist of EUR 587k for the technical due diligence, economic assessment and the environmental and social due diligence.

Company Contact Information

Dr. Mohamed Hamdy - General Manager Assistant and Deputy Project Manager (APC)
mohamedhamdyabdo@alx-pc.com

PSD last updated

06 Oct 2020

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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