On 24 November 2016, the Bank signed a project with the City of Amman to finance priority solid waste investments in Amman (the "Project"). The financing is structured in two tranches:
- Tranche I, consisting of JOD 40 million, committed at signing and used to refinance GAM's existing debt to release funds for a comprehensive solid waste crisis response programme. Tranche 1 is co-financed by a GBP 5 million investment grant by an international donor for urgently needed solid waste investments.
- Tranche II, consisting of up to EUR 50 million loan from EBRD, remains uncommitted and will finance a series of investments aimed at addressing the City's urgent solid waste needs. Tranche II components are expected to be co-financed by capex grants of up to 50 per cent, provided by international donor(s) and the Bank through its Shareholder Special Fund ("SSF"). To date (June 2020 update), the Bank has financed 5 sub-projects under this Tranche as follows:
- Tranche II-A: signed on 10 May 2017, for the construction of a fifth cell at Al-Ghabawi Landfill and its associated leachate lagoons. The component is financed by a JOD 3.25 million EBRD loan and a GBP 4.25 investment grant.
- Tranche II-B: signed on 9 May 2018, to finance the purchases of 75 compactors and other equipment to be used by GAM in solid waste operations. The component is financed by a JOD 9.9 million EBRD loan and two investment grants of GBP 5.63 million and USD 7.4 million respectively.
- Tranche II-C: signed on 29 November 2018, to finance the capping of cell 4 wells, drilling and installation of the Landfill Gas Recovery ("LFG") collection system, and connecting it to the existing LFG system for cells 1,2 and 3. This component is financed by a JOD 3.2 million EBRD loan and a EUR 3.8 million grant.
- Tranche II-D: signed on 19 December 2019 , to finance the upgrade and rehabilitation of Al-Shaer waste transfer station. This component is financed by a JOD 2.5 million EBRD loan and a grant of USD 3.5 million
- Tranche II-E: signed on 19 December 2019 , to finance the purchase of 25 sweeper vehicles for use in solid waste operations in Amman. This component is financed by a JOD 2.4 million and a grant of EUR 3.0 million.
In addition, in the solid waste sector, EBRD provided GAM a USD 13 million sovereign-guaranteed loan in 2015 to finance the construction of a landfill gas recovery system at the Al-Ghabawi landfill site under a design, build and operate contract. The loan was co-financed by an up to USD 5 million loan funded by the Green Energy Special Fund ("GESF") administered by the EBRD.
The financing package forms part of the EBRD's Refugee Crisis Response Programme. GAM, which hosts around 30 per cent of the Syrian refugee population in Jordan, is largely affected by the on-going refugee influx. This places a heavy strain on Amman's municipal infrastructure and in particular on the solid waste management system. There is an urgent need to strengthen GAM's resilience as well as to optimise its financing, and Tranche I will allow GAM to liberate urgently needed funds to enable it to deal with the on-going challenges.
Tranche II of the investment package is targeted towards financing specific investments in the solid waste sector to mitigate the effects of the refugee influx and provide more sustainable and long-term solutions. These investments will be assessed on a project-by-project basis and are expected to be co-financed by investment grants made available by other partners, including, but not limited to, the European Union.
- Institutional Support: The Project is expected to facilitate a comprehensive institutional support programme. The programme will introduce measures to increase the operational and financial management of solid waste services, leading to further commercialisation of the sector. In addition, ways of increased private sector participation, corporatisation, regulatory reform and the use of alternative technologies will be assessed in order to enable efficient and sustainable service delivery.
- Framework for Markets: The Project will contribute to the strengthening of GAM's financial management by preparing it for a credit rating exercise aimed at enabling GAM to access capital markets.
- Demonstration Effect: The Project will contribute to the development of sustainable, EU compliant and well-operated solid waste management structures that facilitate better cost recovery and provide an example away from the current non-economical and environmentally unsustainable practice.
MUNICIPALITY OF GREATER AMMAN
GREATER AMMAN MUNICIPALITY
EBRD Finance Summary
Sub-sovereign, long-term financing package of up to EUR 180 million. Subject to the availability of donor funding, the package is expected to be co-financed by commercial banks and investment grants, to be assessed on a project-by-project basis.
Total Project Cost
Environmental and Social Summary
Each Tranche is categorised separately under the 2014 Environmental and Social Policy. Tranche I was categorised as C, since the refinancing of GAM's existing debt will have no adverse future Environmental and Social ("E&S") impacts. Tranche I was approved by the Board in May 2016. The category for each sub-tranche under Tranche II was subjected to Initial Environmental and Social Examination ("IESE") as the scope of investments under each Sub-Tranche (component) was determined. A summary of issues for each sub-tranche is provided below.
Tranche II-A: Categorised B under the 2014 Environmental and Social Policy. Tranche II-A investments involve emergency investments for the construction of a new cell 5 and associated leachate lagoons to expand the existing landfill cells. Environmental and Social Due Diligence ("ESDD") for Tranche II-A has been undertaken by independent external consultants and focused on the implementation of Operational Procedures for the whole landfill, including waste. These investments will not require any additional land acquisition, resettlement or displacement and will not affect any sensitive sites. The E&S issues and impacts are expected to be site-specific and readily identified and addressed through appropriate mitigation measures. The new landfill cell 5 will be designed to EU standards in line with requirements of the EU Landfill Directive. The whole waste management system in Amman will require further enhancement to be in line with EU Waste Framework Directive ("WFD"), which would need to involve, among other measures, separate collection and safe disposal of hazardous materials of domestic origin which are currently landfilled in the municipal landfill. This will also enable the operation of the landfill in accordance with the EU Landfill Directive. A separate PSD has been published here https://www.ebrd.com/work-with-us/projects/psd/mr3-gam-solid-waste-crisis-response-cell-5.html
Tranche II-B: Categorised B under the 2014 Environmental and Social Policy and involves emergency investments for the purchase of the refuse collection vehicles and compactors equipment for the use of GAM. The investment will increase efficiency of solid waste management and transportation in Amman. The E&S issues and impacts are site-specific and readily identified and addressed through appropriate mitigation measures. ESDD for Tranche II-B has been carried out by independent external consultants. An updated ESAP and Stakeholder Engagement Plan ("SEP") covering Tranche 2B investments has been developed for GAM, and the implementation of these are a condition of the Bank's financing.
Tranche II-C: Categorised B under the 2014 Environmental and Social Policy and involves emergency investments for the expansion of the LFG system to Cell 4 at the existing Al Ghabawi landfill site managed by GAM. ESDD for Tranche 2C investments into LFG extension to Cell 4 has been carried out by independent external consultants. The project will have strong E&S benefits, however, there are risks associated with the existing Al Ghabawi landfill operations. The E&S issues and impacts associated with Tranche 2C component are expected to be site-specific, readily identified and addressed through appropriate mitigation measures. Any EHS risks and shortcomings associated with LFG extension will need to be addressed and carefully managed to mitigate the Bank's reputational risk. Based on the estimation that an additional 25,930 MWh of electricity could be generated annually from the landfill gas captured from Cell 4, anticipated reduction of GHG emissions is estimated to be over 270,000 tonnes of CO2-eq annually. Other key benefits of the Cell 4 capping include reduction of the risk of landfill fires, prevention of odours and improvement to overall worker and public health and safety conditions at and in the vicinity of the landfill, better stability of the cell and prevention of dispersion of waste. GET potential of T2C component is assessed as 100% due to capture of GHG gases and reduction of associated climate change impacts from waste management operations.
Tranche II-D: Categorised B under the 2014 Environmental and Social Policy and involves emergency investments in the rehabilitation and expansion of the existing waste transfer station (WTS) in Al-Shaer. ESDD for the Tranche II-D investment has been carried out by independent external consultants and concluded that the E&S issues and impacts are site-specific and readily identified and addressed through appropriate mitigation measures. The investment will improve the current environmental, worker and community health and safety situation of Al-Shaer WTS, which does not include any fully closed waste compaction units and due to severe pressure involves dumping of solid waste in an open emergency area thus resulting in unnecessary pollution, odours and nuisance as well as higher health and safety risks for workers and local community. The Project will address both issues by constructing a pre-compaction unit and expanding the capacity of the WTS within its existing footprint. No involuntary land acquisition will be required as current land belonging to GAM is sufficient for potential site upgrade. For future expansions, GAM is planning to purchase surrounding private land based on a 'willing buyer willing seller' arrangement.
Tranche II-E: Categorised B under the 2014 Environmental and Social Policy and involves emergency investments for the purchase of twenty five sweepers for use in GAM's solid waste operations. The investment will increase efficiency of solid waste management in Amman. The E&S issues and impacts are site-specific and readily identified and addressed through appropriate mitigation measures. ESDD for the Tranche II-E investment has been carried out by independent external consultants. The new vehicles / road sweepers specifications in the tender documents would need to be aligned with the respective EU substantive environmental standards (e.g. in terms of emissions) and EU safety requirements for Heavy Goods Vehicles. The respective vehicle operation and maintenance requirements have been included in the updated ESAP, including adequate driver training on the issues of public and road safety.
Technical Cooperation and Grant Financing
The following technical co-operation (TC) assignments are included as part of this project:
- Solid Waste Action Plan, to assist the Bank in the definition of the specific investments to be included in the Project. EUR 40,000 to be financed from the MEI team budget.
- Technical, Environmental and Social Due Diligence and Financial Management Training, to specify and detail the technical, environmental and social feasibility of the urgent solid waste investment needs and to ensure that GAM has the financial skills and knowledge to process the tranches of the project within the Banks timeline and according to the Banks requirements. EUR 450,000, financed by the EBRD Infrastructure Project Preparation Facility.
- Project Implementation Support, including assistance for the procurement of goods and works and in implementing the Environment and Social Action Plan for the urgent solid waste investments needs. The estimated cost of the Framework assignment is up to EUR 2.5 million, proposed to be funded by an international donor or the SSF.
- Stakeholder Participation Programme to facilitate the cooperation between associated parties in the crisis response context and aimed at enhancing public ownership and raising public awareness on issues related to the project implementation and solid waste management. The estimated cost of the Framework assignment is up to EUR 500,000
- GAM Solid Waste Project-Environmental & Social Implementation Support & Supervision TC, to provide a much needed guidance and support to GAM with further increasing their internal capacity, providing training and guidance in the implementation of their E&S commitments under solid waste projects, including implementation of the respective ESAP commitments and SEP; USD 829,784 (two extensions)
Company Contact Information
Engineer Ameen Saraireh, Senior Environmental Advisor
+962 79 816 6066
Greater Amman Municipality
PSD last updated
23 Jun 2020
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Independent Project Accountability Mechanism (IPAM)
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