NEPCO Restructuring loan

Location:

Jordan

Project number:

50034

Business sector:

Power and energy

Notice type:

Public

Environmental category:

B

Approval date:

28 Nov 2018

Status:

Disbursing

PSD disclosed:

16 Aug 2018

Translated version of this PSD: Arabic

Project Description

The EBRD is considering providing a sovereign guaranteed loan to the National Electric Power Company (NEPCO) to assist NEPCO in its reforms and developing Jordan's electricity sector. The Project will support NEPCO to adapt its operations to allow for further development of renewable energy in Jordan and to improve the sector's sustainability.

Project Objectives

The proceeds of the Bank's loan will be used for NEPCO to (i) finance capital expenditures to improve renewable energy integration, including smart grid systems and new substations; and (ii) refinance existing debt to lengthen the tenors and provide terms more consistent with its operations.

Transition Impact

The Project will contribute to the Competitive and Well-Governed transition qualities through a combination of capex investment and technical cooperation. Specifically, the Project will:

1) Promote renewable energy by enhancing the capabilities of the grid to absorb and manage power produced by renewable energy sources; and

2) Strengthen and reform NEPCO to improve the electricity sector's sustainability.

Client Information

NATIONAL ELECTRIC POWER COMPANY

JORDAN SOVEREIGN i National Electric Power Company (NEPCO) guaranteed by the Hashemite Kingdom of Jordan.

NEPCO is a 100% state-owned central entity in the Jordanian electricity system acting as transmission system owner and operator, dispatcher, single wholesale buyer of electricity and single buyer of fuel and natural gas for conventional generation.

EBRD Finance Summary

USD 265,000,000.00

Up to USD 265 million sovereign guaranteed loan to NEPCO.

Total Project Cost

USD 265,000,000.00

Up to USD 200 million of the proceeds will be applied to refinance short term debt.

Environmental and Social Summary

Categorised B (ESP 2014). The environmental and social (E&S) risks associated with high voltage electricity transmission and distribution activities can be significant, however as the loan is going to be used mainly for debt refinancing as well as the construction of substations, the associated E&S impacts should be site specific, readily identifiable, and can be mitigated through the implementation of a targeted Environmental and Social Action Plan (ESAP).

Environmental and Social Due Diligence (ESDD) is currently underway by independent consultants, and entails a documentation review, site visit and follow-up meetings with the Client. The focus of the Environmental and Social Due Diligence will be on NEPCO's corporate procedures in terms of Environmental, Health and Safety, and Social management.

The main E&S risks associated with NEPCO's activities include Occupational Health and Safety, as construction of substations will require a significant volume of works at height and excavation works; aspects related to land acquisition and compensation, stakeholder engagement, contractor management, and impacts on biodiversity.

Additional TC may be required to help with institutional strengthening of Environmental, Health and Safety and Social management at NEPCO. A review of technical assistance provided by other IFI's will be undertaken to look at any possible synergies.

Based on the ESDD, a Non-Technical Summary, Stakeholder Engagement Plan and an ESAP will be developed and agreed with the Company prior to Final Review. This PSD will be updated once ESDD is completed.

Non-Technical Summary | Stakeholder Engagement Plan

Technical Cooperation

Technical assistance will be provided to the company for the purposes of:

1) Environmental and Social Due Diligence - an Environmental and Social Assessment of the Company and Project will be carried out by an external consultant with the aim of providing recommendations for environmental, health and safety, and social management of the Company, confirming the categorisation of the Project and agreeing on an ESAP.

2) Financial Forecasting and Risk Management - the assistance aims at supporting NEPCO in improving its forecasting and analytical accounting tools and developing risk management strategies for each business line.

3) Corporate Governance and Compliance - the assistance targets improvements in the corporate governance structure and decision making capabilities of the Company.

4) E-Procurement - the assistance aims to support the implementation of an electronic procurement platform and system aiming to extend NEPCO's procurement opportunities to a wider universe of companies, including small and medium enterprises (SMEs), and allow for competitive pricing and improved cost management.

5) Renewable energy absorption - support will be provided to analyse Jordan's renewable energy absorption capacity and options to increase it.

Company Contact Information

Nisreen Abu Aboud
nabuabood@nepco.com.jo
+96265858615
http://www.nepco.com.jo/
National Electric Power Company 275 Zahran Street P. O. Box 2310 Amman 11181 # Jordan

Business opportunities

For business opportunities or procurement, contact the client company.

For state-sector projects, visit EBRD Procurement: Tel: +44 20 7338 6794
Email: procurement@ebrd.com

General enquiries

EBRD project enquiries not related to procurement:
Tel: +44 20 7338 7168
Email: projectenquiries@ebrd.com

Public Information Policy (PIP)

The PIP 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. Please visit the Public Information Policy page below to find out how to request a Public Sector Board Report.
Text of the PIP

Project Complaint Mechanism (PCM)

The Project Complaint Mechanism (PCM) is the EBRD's accountability mechanism. It provides an opportunity for an independent review of complaints from individuals and organisations concerning EBRD-financed projects which are alleged to have caused, or are likely to cause, environmental and/or social harm.

Please visit the Project Complaint Mechanism page to find information about how to submit a complaint. The PCM Officer (pcm@ebrd.com) is available to answer any questions you may have regarding the submission of a complaint and criteria for registration and eligibility, in accordance with the PCM Rules of Procedure.

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