Translated version of this PSD: Arabic
Provision of long-term senior debt financing of up to USD 29.1 million (EUR 26.9 million equivalent) to finance the construction of a 50 MW solar photovoltaic plant located in the proposed 1.8 GW Benban solar complex in the Aswan province of Egypt (the "Project"). The Project will be one of the first utility scale solar plants in Egypt and will support the country in increasing its renewable energy capacity. The Project is part of a larger portfolio of three plants for a total capacity of 120 MW developed in Benban by the same group of lead sponsors.
The Project will be developed under the programme implemented by the Egyptian government offering feed-in tariffs to projects of up to 50 MW capacity to stimulate private investment in over 4 GW of wind and solar power. This scheme aims to support Egypt to move to a more environmentally sustainable and diverse electricity sector by exploiting the country's vast renewable energy potential. It is expected to improve the environmental characteristics of Egypt's power sector by reducing
emissions of local pollutants and CO2, as well as water consumption.
Setting environmental standards: the Project will be 100% compliant with the Bank's Green Economy Transition Approach and will support the expansion of renewable energy generation to meet Egypt's targets in this area, including its Intended Nationally Determined Contribution, submitted to COP 21.
As the Project would avoid the need for new thermal generation, it is expected to achieve sizeable environmental benefits, with an expected reduction in annual CO2 emissions of 60,000-70,000 tonnes.
Demonstration of new replicable behaviour and activities: The Project will be among the first utility scale solar and first private renewable projects to be implemented in Egypt and thus set an important precedent for further development, unlocking the country's substantial renewable energy potential.
More widespread private ownership: The Project will increase the share of privately owned generation capacity in Egypt where nearly all domestic electricity consumption is currently generated in state owned facilities.
INTERNATIONAL COMPANY FOR WATER AND POWER PROJECTS (ACWA POWER)
The Borrower will be a special purpose vehicle incorporated in Egypt for the sole purpose of developing, constructing and operating the Project. The Borrower will be ultimately owned mainly by (i) ACWA Power International incorporated in Saudi Arabia (ACWA Power), and (ii) Hassan Allam Holding incorporated in Egypt (Hassan Allam).
EBRD Finance Summary
A senior secured loan of up to USD 29.0 million (up to EUR 26.5 million equivalent), co-financed with other parties.
Total Project Cost
USD 77.5 million (EUR 70.8 million equivalent).
Environmental and Social Summary
The Project has been Categorised B in accordance with the EBRD's Environmental and Social Policy (2014) whereby Environmental and Social (E&S) risks and impacts are site specific, readily identifiable, and can be assessed and mitigated.
Independent Environmental and Social Due Diligence (ESDD) has been undertaken on the Project and the cumulative impacts associated with the wider Benban development and an Environmental and Social Action Plan (ESAP) has been agreed with the Client.
The E&S risks and impacts associated with the development of several adjacent 50MW solar photovoltaic projects will be limited in extent and nature. ESDD concluded that the Project is structured to comply with the Bank's Performance Requirements and that the Client has the institutional capacity to implement the Bank's PRs. ESDD also confirmed that the ACWA Benban One for Energy JSC (Borrower) Project within the wider Benban complex present no specific E&S sensitivities thereby confirming project categorisation.
ESDD has focused on the Sponsor's ability to construct and operate the Project in accordance with the Bank's Performance Requirements, particularly with regard to having sufficient E&S capacity in place and the proposed measures for contractor management and project implementation.
The wider Benban complex comprises a 37 km2 area allocated to Egypt's New and Renewable Energy Agency (NREA). This area has been sub-divided into plots each allowing for a plant of 20 MW or 50 MW with a total capacity for the entire site of up to 1,800 MW. The Bank's ESDD considered the larger development of a number of similar projects within this area, which can give rise to potential cumulative impacts such as: workforce sourcing; resource needs; logistical arrangements; and the requirement for associated facilities including grid connection(s), even though the impacts of each individual project are not anticipated to be significant.
In order to assess the cumulative impacts the Bank has supported NREA to undertake a Strategic Environmental and Social Assessment (a SESA) of cumulative issues. This is outlined in the Egypt - Renewable Energy Framework (DTM 48213) PSD. As part of the due diligence and the SESA, the Bank has engaged with its clients and also worked with other IFIs and the Egyptian authorities to develop a master plan for managing E&S issues by the authorities and developers at the Benban site. EBRD continues to be closely involved in oversight of the implementation of the SESA requirements and will continue to monitor progress throughout project implementation.
Through the Bank's relationship with the individual sponsors, mitigation of the cumulative risks will be incumbent on all of the developers working in collaboration. The project specific ESAP commits ACWA Power to actively contribute to this initiative to ensure that Project benefits are realised and that E&S risks are adequately managed.
The Project will be monitored alongside other Benban sub-projects by EBRD and an independent Lender's E&S Consultant.
This Project, as part of several solar photovoltaic projects financed by EBRD in Egypt, is connected to two TC assignments:
1/ Solar Grid Code Preparation
EBRD has mobilised TC funding from the SEMED Energy Efficiency Policy Dialogue Framework (funded by EU-NIF) in order to provide technical advice to the Egyptian authorities in the preparation and drafting of a Solar Grid Code.
2/ Strategic Environmental and Social Assessment
EBRD has mobilised TC funds under the Southern and Eastern Mediterranean Multi-Donor Account to support NREA in preparing the SESA for the Benban solar site in Egypt. EBRD stressed the importance of the evaluation and mitigation of the cumulative and aggregated E&S aspects of those projects and to have a coordinated risk management approach for the entire Benban site. The SESA will ensure that the large development planned in Benban is carried out in accordance with best
international practice and in a manner which maximises the benefits for the local population and other stakeholders.
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