32206 - Karbala Cement Manufacturing Limited

Who We Are
Who We Are

IFC is the largest global development institution focused on the private sector in developing countries. By encouraging growth, IFC advances economic development, creates jobs and improves the lives of people.
More About Us
About IFC

Our Leadership

Development Partners
Accountability

Learn more about accountability
Annual Report

Download the Report
What We Do
What We Do

IFC advances economic development and improves the lives of people by encouraging the growth of the private sector in developing countries. We achieve this by investing in impactful projects, mobilizing other investors, and sharing expertise.
What We Do Overview
SOLUTIONS

Our products and services
OUR PRIORITIES

Climate Business

Fragile & Conflict Afflicted Situations

Gender

Mobilizing Private Capital

Sustainability
SECTORS & EXPERTISE

Agribusiness & Forestry

Creative Industries

Education

Financial Institutions

Funds

Health

Infrastructure

Manufacturing

Public-Private Partnerships

Tourism, Retail & Property

Trade & Supply Chain Finance

Venture Capital

Working Upstream
Where We Work
Where We Work

As the largest global development institution focused on the private sector, IFC operates in more than 100 countries around the globe. We apply lessons learned in one region to solve problems in another.
Overview
By Region

Africa

East Asia and Pacific

Europe

Latin America and the Caribbean

Middle East and Central Asia

South Asia
Our Impact
Our Impact

Our impact improves lives. IFC brings a clear set of advantages to the world’s most challenging markets. Including a history of innovation, a global mandate, and a determination to achieve measurable development impact.
Our Impact Overview
PRINCIPLES & MEASUREMENT

Impact Investing at IFC

Measuring and Monitoring (AIMM)

Evaluation

Sustainable Development Goals (SDGs)

Owned by 186 member countries and consistently rated AAA/Aaa. IFC aims to achieve our mission of promoting development by providing debt and equity to the private sector, through a range of benchmark and bespoke products.

For Partners

For Investors

Get in Touch

Environmental & Social Review Summary

Project Number

32206

Company Name

KARBALA CEMENT MANUFACTURING LTD.

Date ESRS Disclosed

Apr 25, 2016

Country

Iraq

Region

Middle East

Last Updated Date

Jun 12, 2021

Environmental Category

B - Limited

Status

Completed

Previous Events

Approved : Nov 9, 2012
Signed : Dec 6, 2012
Invested : Mar 26, 2013

Sector

Cement

Industry

Manufacturing

Department

Regional Industry MAS MCT

Project Description

The project entails a loan to support development of Lafarge’s 2.3 million ton per annum (mtpa) cement plant located near Karbala, Iraq. This is a follow-on investment to an investment IFC made in 2010 to support development of two cement plants in Iraq by Lafarge, including the one located near Karbala.

The Karbala plant was in a state of deterioration in 2010 when the initial lease was negotiated between Lafarge and the Iraqi authorities for acquisition of the plant. More specifically, the plant required substantial technical rehabilitation to comply with national and IFC requirements. As a result of the overall project implementation, to date kiln line No. 2 has been fully rehabilitated to comply with modern environmental and energy efficiency standards, except for a cooler filter that will be changed so as to act as a joint unit between lines No. 1 and No.2. Kiln line No. 1 now closed and in the process of being rehabilitated to also align with modern environmental and energy efficiency standards. IFC’s follow-on investment will be used to complete the rehabilitation of this kiln, and replace the joint cooler filter. The rehabilitation work is being undertaken jointly by the original equipment supplier Polysius and Sinoma, an experienced Chinese EPC contractor.

Overview of IFC's Scope of Review

During the appraisal of the project in 2010, IFC specialists met with the project Sponsor, visited the Sponsor’s technical center in Cairo, Egypt and reviewed operational data for a plant recently rehabilitated to establish Lafarge’s ability to rehabilitate a cement plant to an acceptable standard of operations. The Environmental and Social Summary document disclosed in 2010 for IFC’s previous investment can be found using the following link: ifcextapps.ifc.org/ifcext/spiwebsite1.nsf/78e3b305216fcdba85257a8b0075079d/7eb183d18c93d6e4852577110067bec6?opendocument

IFC’s environmental specialist also visited the Karbala facility in December 2013 during the rehabilitation process and reviewed operational and health and safety documentation for the Karbala cement plant. The December 2013 visit revealed a very well run and safe rehabilitation process, but also revealed deficiencies in the clinker cooler upgrades. These deficiencies will be addressed in this follow on project financing. Based on the above knowledge of the plant unit’s general history as well as upgrades achieved till date, the appraisal for this project has been desktop. A follow up supervision is planned for 2016 to verify stable operational data for the newly rehabilitated line 2.

E & S Project Categorization and Applicable Standard

While all Performance Standards are applicable to this investment, IFCs environmental and social due diligence indicates that the investment will have impacts which must be managed in a manner consistent with the following Performance Standards. If IFCs investment proceeds, IFC will periodically review the the project’s ongoing compliance with the Performance Standards

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
PS 4 – Community Health, Safety and Security
If IFC’s investment proceeds, IFC will periodically review the the project’s ongoing compliance with the Performance Standards
During the appraisal, the performance of IFC’s investment has been evaluated and no new land acquisition was required for the plant and therefore there are no impacts related to Land Acquisition and Involuntary Resettlement (PS5). PS:6 Biodiversity Conservation and Sustainable Management of Living Natural Resources is not applicable as there is no land conversion leading to biodiversity loss, no Indigenous Peoples (PS7) reside in the project area, and there are no Cultural Heritage (PS8) issues as the land has been allocated and used for industrial cement production for many decades.

The proposed project is a further investment in a delayed but otherwise well performing current IFC investment in an existing cement manufacturing plant. The original investment project has, despite delays caused by the difficult conflict affected state where the project is located, been developed in accordance with international standards, by an experienced Sponsor committed to sound environmental and social practices. The project is to provide extra financing to finalize the project as originally anticipated and does not entail any capacity increases. The overall effect of the investment will therefore be further improved environmental performance, based on the replaced cooler filters, thereby resulting in compliance with both national and IFC requirements. With no indication of impacts related to Performance Standards 5 through 8 anticipated, and only readily mitigated environmental issues under Performance Standards 1 - 4, this is a Category B project in accordance with IFC’s Environmental and Social Sustainability Policy.

Environmental and Social Mitigation Measures

Stakeholder Engagement

The Karbala Cement plant has actively developed a community engagement program and has engaged in activities in Karbala, the nearest town to raise its profile as a socially responsible operator. Karbala has also developed mechanisms to ensure ongoing consultation and early addressing of any grievances. This system, which includes monthly meetings between the Community Liaison Officer and the local communities is a continuing practice and not designed to stop at the end of the rehabilitation.

Contact details for the Karbala community engagement representative are as follows:
Mr. Mohamed Juhaishi
Security and PR Manager
Phone: +964.780.912.4343
Email: mailto:Mohamed.Juhaishi@LafargeHolcim.com

Broad Community Support

Environmental & Social Action Plan

Title	Anticipated completion Date
Assure the Karbala EMS is implemented and maintained according to Lafarge Standards, and PS2 compliant, by designating the former environmental manager of the Lafarge Bazian operation to complete the copying of the Bazian system and obtain ISO 14001 certification.	12/31/2016
To assure appropriate emission standards from electrical generators used for permanent power supply a new Captive Power Plant (Hyundai manufacture) will be commissioned and tested for adherence to WBG guideline standards. Industrial Performance Test.	05/31/2016
The captive power plant is a leased facility from MDS Arabia. KCML does not own or operate the power plant. Adherence to WBG standards will be fully assured after buyback of power plant in 2020.	02/28/2020
Operate the rehabilitated line 2 in compliance with the emission guidelines as defined in the Work Bank Group Environmental, Health and Safety Guideline emissions limits including best efforts attempt to achieve WBG standards (initial design standard, but upgraded with low-NOx burner and best possible inserts in main stack filter) and installation of continuous monitoring for particulate, nitrogen oxides, and sulfur dioxide on the main stack, except for the replacement of the cooler filter which will be completed as part of the recommissioning of line 1, scheduled for 31st August, 2016. At the same time line 1 will undergo an identical rehabilitation to be completed 30th September, 2016. Once completed, operate this kiln in accordance the same parameters as defined above for kiln No. 2.	09/30/2016
Replace the current clinker cooler dust suppression systems for the two cement manufacturing lines with a single joint system to achieve <25 mg/Ncm or less for particulate emissions.	08/31/2016
Defective water drainage lines to be rehabilitated and unclogged.	12/31/2016
All quarries need to have management and reclamation plans including broad total quarry utilization plans, a five-year oversight plan, a detailed utilization plan for the upcoming 12 months, and progressive landscaping relative to surrounding area as mined out areas become ready.	06/30/2017

**Information on IFC's Policy and Performance Standards on Environmental and Social Sustainability can be found at www.ifc.org/sustainability

IFC supports its clients in addressing environmental and social issues arising from their business activities by requiring its real sector clients to set up and administer appropriate grievance mechanisms and/or procedures to address complaints from Affected Communities in relation to environmental and social issues arising from IFC's clients' business activities. Since 2012, IFC's Financial Intermediary clients applying the Performance Standards are required to develop External Communications Mechanisms to receive and review inquiries or complaints from any interested party regarding the E&S risks and impacts of their operations.

For IFC projects that are active or under consideration, individual(s), or their authorized representative(s), who allege they have been or will be adversely affected by E&S risks or impacts arising from IFC's clients' business activities, may submit a complaint to IFC directly for consideration. When receiving an E&S complaint, IFC engages with complainants and works with its clients to find solutions to E&S concerns as quickly and efficiently as possible.

Complaints can be submitted to IFC online at www.ifc.org/escomplaints or by email to EScomplaints@ifc.org.

IFC complaint response is separate from and complementary to IFC’s clients’ project level grievance mechanisms and IFC’s Independent Accountability Mechanism (CAO). Lodging a complaint directly with IFC does not, at any time, restrict access to CAO.

Affected communities have unrestricted access to the Compliance Advisor Ombudsman (CAO), the independent accountability mechanism for IFC and MIGA. CAO facilitates the resolution of complaints related to IFC and MIGA projects and sub-projects, undertakes reviews of IFC’s and MIGA’s environmental and social compliance, fosters public accountability for their commitments, and enhances the environmental and social performance of IFC and MIGA.

Independent of IFC and MIGA management and reporting directly to the IFC and MIGA Boards of Executive Directors, CAO helps resolve issues raised about the environmental and social impacts of projects through a neutral, collaborative, problem-solving approach via its Dispute Resolution function. It also reviews IFC’s and MIGA’s compliance with environmental and social policies, assesses related harm, and recommends remedial actions through its Compliance function. Additionally, CAO provides advice to IFC, MIGA, and their Boards to enhance environmental and social sustainability performance and minimize the risk of harm.

Complaints may relate to environmental and social harm regarding any aspect of the planning, implementation, or impact of a project or sub-project, and can be made by any individual, group, community, entity, or other party affected or likely to be affected by the environmental or social impacts of an IFC- or MIGA-financed business activity.

Complaints can be submitted by any of the following methods:

Online form: available at https://www.cao-ombudsman.org/
Mail/Hand Delivery to: 2121 Pennsylvania Avenue, NW, Washington, DC 20433, USA
Voice mail: +1 202 458 1973
Email: cao@worldbankgroup.org
SMS, WhatsApp, Telegram, and Signal: +1 202 650 2627

CAO receives and addresses complaints in accordance with the CAO Policy, which can be accessed at: https://www.cao-ombudsman.org/policies-guidelines.

This Environmental and Social Review Summary (ESRS) is prepared by IFC to disclose its findings and recommendations related to environmental and social considerations regarding potential investments. Its purpose is to enhance the transparency of IFC's activities. For any project documentation or data included or attached herein, whether prepared by the project sponsor or otherwise, authorization has been given for public release by the project sponsor. IFC considers that this ESRS is of adequate quality for release to the public, but has not necessarily independently verified all of the project information therein.
It is distributed in advance of IFC Board of Directors' consideration and may be periodically updated thereafter. Board dates are estimates only and this document should not be construed as presuming the outcome of the Board Directors’ decision. The following ESRS is disclosed in accordance with IFC's Access to Information Policy (AIP).

The map is for illustrative purposes and does not imply the expression of any opinion on the part of the World Bank, concerning the legal status of any country or territory or concerning the delimitation of frontiers or boundaries. Country borders or names do not necessarily reflect the World Bank Group's official position. In some cases, available project location information is limited to the country of the project's activities. Locations are approximate.

Projects

Environmental & Social Review Summary

Project Description

Overview of IFC's Scope of Review

E & S Project Categorization and Applicable Standard

Environmental and Social Mitigation Measures

Stakeholder Engagement

Broad Community Support

Environmental & Social Action Plan

Similar Projects

Projects

Environmental & Social Review Summary

Project Description

Overview of IFC's Scope of Review

E & S Project Categorization and Applicable Standard

Identified Applicable Performance Standards

Environmental and Social Categorization and Rationale

Environmental and Social Mitigation Measures

Environmental and Social Mitigation Measures

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

PS 4: Community Health, Safety and Security

Stakeholder Engagement

Stakeholder Engagement

Local Access of Project Documentation

Broad Community Support

IFC's Determination of BCS

Environmental & Social Action Plan

Environmental & Social Action Plan

Press-Release

Related SII

Similar Projects

Information on E&S Complaints and Grievance Mechanisms

Disclaimer