PROJECT

Projects

Environmental & Social Review Summary

Project Number

38207

Company Name

MAHATAT AL ZARQA LE TAWLEED AL TAKAH AL KAHRABAIEYAH

Date ESRS Disclosed

Jul 15, 2016

Country

Jordan

Region

Middle East

Last Updated Date

Feb 26, 2017

Environmental Category

A - Significant

Status

Active

Previous Events

Approved : Oct 27, 2016
Signed : Dec 8, 2016
Invested : Jan 9, 2017

Sector

Gas - Thermal Power Generation

Industry

Infrastructure

Department

Regional Industry INF MCT

Project Description

The project consists of the design, construction, ownership and operation of a 485MW (net generating capacity after deducting auxiliary electricity consumption) combined cycle gas fired power plant located 31 km north east of Amman in the city of Zarqa Industrial Zone, the Hashemite Kingdom of Jordan (the “project”). The project will substitute Hussein Thermal Power Station, one of the oldest and most inefficient Heavy fuel oil (HFO)–fired power plants in Jordan which was decommissioned in December 2015, with a more efficient power plant.

The proposed project is expected to cost approximately US$475 million and the proposed IFC investment consists of an A-loan of up to US$75 million. The project is being developed by ACWA Power (“the sponsor”), through its subsidiary in Jordan Mahatat Al Zarqa Le Tawleed Al Takah Al Kahrabaieyaha (“the company”). EBRD is considering co-financing this project. The project will be constructed on about 14.9 ha of a mostly undeveloped area of the decommissioned power plant site, which is located within the City of Zarqa Industrial Zone. Despite being in an industrial zone, within a radius of 1.75 km from the project site there are approximately 350 residential structures in Al-Hashemiyeh-south including residential dwellings. The nearest residential receptor is located around 250 m north of the site and there is a National Electric Power Company (NEPCO) training center located 200 m away from the project site. The land for the project was leased to the project company from the sponsor’s subsidiary Central Electricity Generating Company (“CEGCO”, an existing IFC client). Natural gas, the main fuel for the project, will be supplied by NEPCO, the government owned power transmission company and single buyer, via a new subsurface gas pipeline connection to Jordan’s main gas pipeline, which is located approximately 600 m from the project boundary. The project back-up fuel (low-sulphur light distillate fuel oil, or LDO) will be delivered by NEPCO to the site via an existing 1700 m long fuel oil pipeline from the adjacent petrochemical refinery. Process water for the power plant operation will be extracted from 3 new shallow boreholes (95 m – 220 m) located within the project site. The Water Authority of Jordan (WAJ) will supply the power plant with potable water (up to 2450 m3/week) via a new 800 m long water pipeline to be constructed by WAJ. The electricity generating efficiency of the power plant in combined cycle will be 49.6 % (net, LHV basis) or 51.2% (gross, LHV basis).

The project company signed the Engineering, Procurement and Construction (EPC) agreement with Shandong Electric Power Construction Corporation III (SEPCO III), a subsidiary of Power Construction Corporation of China in January 2016. The project pre-construction works already started in May 2016; however, construction activities will start in September 2016. The foreseen project construction period will be about 24 months. The project company signed an operation and maintenance (O&M) contract with ACWA Power’s subsidiary CECGO for the power plant operation in May 2016. A generation License will be issued to the project company by the NEPCO under long-term power purchase agreement (PPA) that will allow the project company to operate the plant for 25 years.

Overview of IFC's Scope of Review

IFC’s review of the project consisted of appraising the following technical, environmental, and social information provided by the project company:
ACWA Power Zarqa CCGT Project, Updated Environmental and Social Impact Assessment (ESIA - Issue 3) Volumes 1 – 4 (Non-Technical Summary, Main Report, Outline Environmental &Social Management and Monitoring Plan, Appendices, 5 Capitals, July 2016; and
Stakeholder Engagement Plan for ACWA Power Zarqa CCGT Project, 5 Capitals, July 2016.

A visit to the project site and its surrounding areas was conducted on May 23-24, 2016. During the site visit, meetings were held with the representatives of sponsor, ACWA Power and the EPC and O&M contractors, including the project director of the company and representatives from the environmental consultancy (5 Capitals) that prepared the project ESIA.

IFC appraised ACWA Equity project #33736, an equity investment in ACWA Power, in 2013 and its ESRS was disclosed on September 20, 2013. In conducting the E&S appraisal of ACWA Zarqa project, ACWA Power’s corporate level information, obtained during IFC’s appraisal of an equity investment in ACWA, was also reviewed. In addition to its equity investment in ACWA, IFC has three existing portfolio projects owned by ACWA Power. The first is ACWA Power Jordan (#30794), an investment in CEGCO, referenced above, and the O&M contractor of the project. The second project is Karadzhalovo SPP (#31543), a 60 MW photovoltaic solar project in Bulgaria (previously developed by another company, but now majority-owned by ACWA Power). The third is ACWA Kirikkale (#35395) a greenfield natural gas fired combined cycle gas turbine (CCGT) power plant in Turkey with an installed capacity of up to 928 MW, including an associated 119 km 380 kV transmission line. These projects are being monitored and to date IFC has evaluated the E&S performance as satisfactory.

E & S Project Categorization and Applicable Standard

Environmental and Social Mitigation Measures

Stakeholder Engagement

Broad Community Support

Environmental & Social Action Plan

Client Documentation

File Name Actions
AP Zarqa CCGT Updated ESIA Volume 4 ISSUE 3_FINAL.pdf
AP Zarqa CCGT Updated ESIA Volume 3 ISSUE 3_FINAL.pdf
AP Zarqa CCGT Updated ESIA Volume 2 ISSUE 3_FINAL.pdf
AP Zarqa CCGT Updated ESIA Volume 1 ISSUE 3_FINAL.pdf
ACWA Power Zarqa CCGT Plant SEP_ISSUE 2_FINAL.pdf