5 sept 2017 aiib approves fiirst Egypt project
Project Summary Information (PSI)
Report No: 000051
Project Name Egypt Round II Solar PV Feed-in Tariffs Programme:
TAQA Arabia for Solar Energy
Country Arab Republic of Egypt
Solar Photovoltaic (PV) Power
Project No 000051
Sponsors TAQA Arabia S.A.E.
Borrower TAQA Arabia for Solar Energy S.A.E.
Environmental and Social Category Category B
Date of PSI prepared or updated 03 August 2017
Estimated Date of Board Consideration September 2017
Date of Concept Approval 30 May 2017
Date of Final Investment Decision 27 July 2017
Egypt has among the best solar resources in the world. The Government of Egypt (GoE) has demonstrated a
strong commitment to the development of renewable energy (RE), both at the policy and strategic level, through
the adoption of ambitious and specific targets, and at the detailed implementation level, through the
development of a detailed contractual and regulatory framework.
The GoE’s Sustainable Energy Strategy 2035 confirmed the country’s target of reaching 20% of electricity
generation from renewable sources by 2022. The importance of RE in reducing Egypt's greenhouse gas (GHG)
emissions is also emphasized in Egypt's Nationally Determined Contribution (NDC) as part of the five key
strategic policies for tackling climate change mitigation.
The first round of a Feed-in Tariffs (FiT) scheme for RE organized by the GoE ended in October 2016. In
September 2016, the GoE authorized a second round (Round 2) of the FiT scheme, targeting a total of 1.3GWac
solar photovoltaic (PV), split among 20MWac, 30MWac and 50MWac projects, all to be located in the Benban
Solar Park near Aswan. The deadline for the developers to reach financial close is October 29, 2017.
II. Project Objectives and Expected Results
The objectives of the Project are to (i) increase Egypt’s generation capacity by exploiting its vast RE potential
and help the country to meet its power demand; and (ii) reduce the dependence on gas and fuel for electricity
generation and move to a more balanced and environmentally sustainable energy mix.
The Project results will be measured by the following key indicators: (i) number of MWac installed; (ii)
number of residential customers that will benefit from the electricity supplied by the Project; and (iii) GHG
emissions avoided on an annual basis (tons of CO2 per year).
III. Project Description
The Project entails the development, financing, construction, testing, commissioning, operation and
maintenance of a 50MWac solar PV power plant located in Benban Solar Park. All output generated by the
Project will be sold to the Egyptian Electricity Transmission Company (EETC) under a 25-year Power
The Project is being developed by TAQA Arabia for Solar Energy S.A.E. (the Borrower), a special purpose
vehicle owned 100% by TAQA Arabia S.A.E. (100%), the Sponsor.
The Project will be co-financed by the International Finance Corporation and other lenders. The summary of
investment information of the IFC can be found in the following link:
IV. Environmental and Social
The Bank has decided to apply IFC’s Policy on Environmental and Social Sustainability, including the
relevant Performance Standards (PSs), to the Project because: (i) it is consistent with the Bank’s Articles of
Agreement and materially consistent with the provisions of the Bank’s Environmental and Social Policy (ESP)
and relevant Environmental and Social Standards; and (ii) the monitoring procedures that IFC has in place
are appropriate for the Project.
Under IFC’s Policy, the Project has been assigned Category B. Four IFC PSs are applicable to the Project: PS
1 – Assessment and Management of Environmental and Social Risks and Impacts; PS 2 – Labor and Working
Conditions; PS 3 – Resource Efficiency and Pollution Prevention; and PS 4 – Community Health, Safety and
Security. A Strategic Environmental and Social Assessment (SESA) for the entire Benban Solar Park was
prepared for NREA with the support of the European Bank for Reconstruction and Development and disclosed
The Bank has carried out its own due diligence, including review of environmental and social risks and
impacts of the Project. The environmental, social, health and safety (ESHS) risks and impacts associated with
the Project are limited, generally project-specific and not irreversible, and can be addressed through the
implementation of good international practice as provided in the Borrower’s Environmental and Social Action
The Bank also found that simultaneous construction of multiple solar power plants at Benban could pose
various ESHS risks, stemming from traffic and transportation, occupational health and safety, worker
accommodation, labor management, waste management, security and the management of stakeholder
expectations from local communities. These cumulative impacts will need to be addressed in an overall ESHS
management and monitoring plan for the Benban Solar Park.
A Facility Management Contractor (FMC) will be hired to develop and implement the overall ESHS plan and
other measures recommended in the SESA and provide construction services in line with IFC PSs for the entire
Benban Solar Park. A Community Grievance Redress Mechanism (GRM) for the Benban Solar Park will also
be developed by the FMC, and the FMC will be responsible for responding to any grievances that are raised in
relation to the site or individual developers.
During preparation, public consultation and information disclosure were carried out, per national and IFC
requirements. IFC has published the results on its website:
V. Estimated Project Cost and Financing Source (US$ million)
The Project cost is up to US$70-75 million. The Bank is considering a senior loan of up to US$17.5-19
million. The Project will be co-financed by IFC and other lenders for up to US$41 million, and the balance
will be covered by equity.
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