A senior loan of up to USD 125 million in favour of the Damietta Alliance Container Terminal (the "Company", the "Borrower"), a special purpose vehicle established to develop a second Container Terminal in Damietta Port ("CT II"or the "Project") on the basis of a 30-year Build, Operate and Transfer Concession Agreement granted by the port landlord, Damietta Port Authority ("DPA").
The Loan is part of a financing package of USD 455 million expected to be co-financed by the Asian Infrastructure Investment Bank ("AIIB"), Deutsche Investitions und Entwicklungsgesellschaft ("DEG"), the International Finance Corporation ("IFC"), and Proparco.
The Project will support the development of the superstructure and purchase of equipment for CT II thereby significantly increasing Damietta Port's competitive position. The Project promotes private sector participation in the infrastructure sector, which will help Damietta Port become a strategic transhipment hub in the East Mediterranean ("East Med").
The Project will also support human capital development within the Damietta Region by broadening access to market relevant skills and training in the sector, and helping reduce the skills gaps in the region by developing a skills development strategy responding to emerging and future needs of the ports and logistics sector.
ETI score: 68
The Project's primary transition will be Competitive as the Project will support a consortium of leading international market players in the delivery of the superstructure for the CT II and in operating and maintaining the terminal.
The Project's secondary transition will be Inclusive as the Project will support human capital development within the Damietta region by developing and implementing a training programme responding to new and emerging skills needed for the sector's expansion.
THE DAMIETTA ALLIANCE CONTAINER TERMINAL
EBRD Finance Summary
Total Project Cost
The EBRD offers long term financing with a grace period that is not available in the market from commercial sources on reasonable terms and conditions.
Environmental and Social Summary
The Project is categorised as B (ESP2019). The Project will finance the construction of superstructure, cargo handling equipment purchase, and operation of a new container terminal ("CT II") within the existing and operational Damietta port. The infrastructure works (dredging and quay wall construction) for CT II are being implemented by Damietta Port Authority ("DPA") and are not financed by EBRD, but constitute the associated facility for the project in line with EBRD Performance Requirement 1 (PR1).
The CT II construction and operation was permitted by the national Egyptian Environmental Agency (EEAA) in 2006, and the validity of the permit was confirmed in 2019. Construction of CT II requires excavation and marine deepening works and offshore disposal of approximately 5,000,000ms of material excavated from the operational industrial port. DPA has undertaken additional national EIA for dredging works in 2021 and received a relevant permit in 2022.
The Project has been subject to Environmental and Social Due Diligence ("ESDD") performed by an independent consultant in 2022/2023. The ESDD confirmed that the Project is being delivered within the existing operational port, heavily modified waters, with low biodiversity sensitivity and surrounded by an industrial area.
As part of the supplementary E&S study, a Ground Investigation has been undertaken by the Client between May - July 2023 that depicted the ground conditions within the Port of Damietta, in the area undergoing the construction of CT II. The samples have been tested against Environmental Quality Standards ("EQS") in a saltwater environment and the Canadian Sediment Quality Guidelines for the protection of aquatic life as international standards. The third party assessment has concluded that the soil and sediment to be excavated from the proposed dock area would not pose a significant risk to human health or the aquatic environment of the Mediterranean Sea.
The Client has commissioned additional noise and air quality baseline surveys and impacts assessment to substitute the national EIA, which confirmed no significant adverse impacts are anticipated during the ongoing construction works at CT II, or once the terminal is operational. Nevertheless, a set of good international practices are included in the ESAP, along with recommendations for improved overall port environmental monitoring regime performed by the port authority.
The ESDD concluded that the Sponsors have environmental and social policies and management systems established for their respective operations. The Sponsors have appointed a qualified E&S Manager at SPV level, to be supported by Sponsors' corporate E&S teams and a Supervision Engineer for the development of detailed ESMS for the project, which is covenanted in the ESAP.
Traffic management is one of key construction and operational risks, as the roads leading to the port are already considered of high road safety risk. The ESAP includes specific requirements to develop and implement a Traffic Management Plan.
Occupational H&S during superstructure construction and terminal operations will follow international standards and will be closely monitored by the Supervision Engineer. Relevant E&S clauses referring to IFI requirements and ESAP have been included in the relevant construction contracts.
Key social risks identified by the ESDD relate to labour influx and local employment, GBVH, need for strengthened engagement and grievance mechanism and potential economic displacement related to land acquisition of 6 nearby rice fields for car park expansion to be undertaken by DPA.
Construction, labour, community H&S and other impacts will be mitigated through a comprehensive ESMS and SEP, as stipulated in the ESAP and the Contract documents. Comprehensive ESAP has been developed and will be agreed prior to the Board.
NTS, SEP will be finalised and disclosed prior to the Board.
Technical Cooperation and Grant Financing
The Project is expected to benefit from a Technical Co-operation assignment to develop a skills development strategy for the port Sector. The TC programme is subject to further confirmation.
Company Contact Information
+49 151 6568 7154
PSD last updated
16 Aug 2023
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Environmental and Social Policy (ESP)
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More information on the EBRD’s practices in this regard is set out in the ESP.
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Access to Information Policy (AIP)
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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.
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