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.
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).
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.
The loan will be provided on a sovereign basis to the Arab Republic of Egypt. The ultimate beneficiary will be APC.
EBRD Finance Summary
Total Project Cost
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)
PSD last updated
06 Oct 2020
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Independent Project Accountability Mechanism (IPAM)
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