PROJECT

Projects

Environmental & Social Review Summary

Project Number

45837

Company Name

AMUNET WIND POWER COMPANY SAE

Date ESRS Disclosed

Aug 26, 2022

Country

Egypt, Arab Republic of

Region

Africa

Last Updated Date

Aug 26, 2023

Environmental Category

A - Significant

Status

Active

Previous Events

Approved : Nov 10, 2022
Signed : Nov 27, 2022
Invested : Aug 24, 2023

Sector

Wind Power - Renewable Energy Generation

Industry

Infrastructure

Department

Regional Industry - INF Africa

Project Description

Note: This constitutes an update to the Environment and Social Review Summary (ESRS) following disclosure of the original document in August 2022. The main reason for the update is to include the findings of the labor and working conditions audit undertaken to the wind turbine supplier, which are now incorporated into this updated version of the ESRS.

The Amunet Wind Power Project (the “Project”) consists of the construction, operation and maintenance of a 500.5 megawatt (MW) installed capacity wind farm located approximately 9 km northwest of Ras Ghareb city in the wind-rich Gulf of Suez region in Egypt’s Red Sea Governorate. The Project site is located within a broader area of 284 km2 allocated by the New and Renewable Energy Authority (“NREA”) for the purpose of generating electricity from wind energy projects. The Project is being developed by Amunet Wind Power Company (“AWPC” or the “Project Company”), a special purpose vehicle incorporated in Egypt by a 60:40 Joint Venture between AMEA Power Ltd.(“AMEA”) and Sumitomo Corporation (“Sumitomo”). IFC is considering an A loan of up to $75 million and a client risk management product in form of interest rate swaps with a loan equivalent exposure of c. $20 million to finance the Project.

The Project will be an independent power producer (“IPP”), generating an average of c. 2,300 GWh annually for sale to the Egyptian Electricity Transmission Company (“EETC”) under a 25-year power purchase agreement (“PPA”) fully guaranteed by the Ministry of Finance (“MoF”). The construction of the Project is anticipated to commence in March 2023 and will require approximately 30 months to complete.

The proposed Project is planned to comprise 77 Wind Turbine Generators (“WTGs”), each with an installed capacity of 6.5 MW and a tip height of 180 meters. Within the Project wind farm site boundary of 69.4 km2 , a 33kV/220kV subordinate substation will be constructed by the Project. From this subordinate substation, a 220kV Over Head Transmission Line (“OHTL”) will run to the southeast to connect with an existing 220kV substation which is connected to the National Electricity Grid. The total length of the 220kV OHTL is approximately 2 kilometers and is expected to be a maximum of 20 transmission towers of 50 meters in height. The detailed design, route, construction, and maintenance during operation lies with the EETC. The 22kV OHTL is considered as an associated facility to the Project. As part of the Project, it is anticipated that 3 cement batching plants will be established by the EPC and/or sub-contractors.

Additional infrastructure will include underground medium voltage transmission cables (33kV) connecting the WTGs with the subordinate substation, a fiber-optic communications network to connect to a Supervisory Control and Data Acquisition (“SCADA”) System, onsite building infrastructure required for the daily operation of the Project including administrative buildings, a control room, a workshop, a storage warehouse, and a road network to assist the installation of the turbines during construction and during operation and maintenance (“O&M”).

The Project site consists of mostly desert ground with sparse vegetation. No human habitation,grazing, or agriculture is observed on, or adjacent to the site. The general area has been designated for petroleum exploration and development activities, and the northern part of the Project site still has old, obsolete, and closed oil wells that are no longer in use. The Project site is under governmental ownership, which has been approved by the Council of Ministers for wind farm projects development.NREA is the current landowner, and the Project Company will enter into a Usufruct Agreement for the use of the land. The nearest community settlement is the Ras Ghareb city, 9 km to the southeast.The Project site avoids impacts on physical or economic displacement or from shadow flicker or operational noise-related nuisance, due to its distance from any settlements.

The Project is located within the Red Sea/Rift Valley flyway, a globally important migration corridor for Migratory Soaring Birds (“MSBs”) and overlaps, in its south-eastern corner by less than 1 square kilometers (km2), with the Gebel El Zeit Important Bird Area (“IBA”). The IBA is designated to protect a strategic location within the flyway where birds are funneled along the Gulf of Suez during their spring and autumn, often landing in large numbers and flying at low altitudes. The overlap area does not have any features that would attract birds (e.g., waterbodies) and is not used as a stopover/resting site and is distant from the main areas where birds concentrate within the IBA.

The Project will be constructed under a turnkey Engineering, Procurement, and Construction (“EPC”) contract, executed by a consortium of Huadong Power China Engineering Corporation Ltd., Power China International Group Limited and HDEC Middle East Co DMCC (together “Huadong Power China Consortium”), all subsidiaries of the Power Construction Corporation of China. The WTGs’ will be supplied, under the EPC contract, by Envision Energy (“Envision”) from its industrial park located in Jiangyin in the province of Jiangsu. Envision will also enter into a 25-year long-term service agreement with the Project Company during the O&M phase for the turbines.

Overview of IFC's Scope of Review

IFC’s environmental and social (E&S) appraisal of the proposed project consisted of: i) reviewing technical, Environmental, Social, Health, and Safety (ESHS) information made available by the project company, EPC and WTG supplier; ii) accompanying the lender appointed E&S Due-Diligence (ESDD) consultant and project company representatives to a 3-days field appraisal at the end of February 2022, inclusive of a site visit to the Project site, stakeholder consultation with the Regional Center for Renewable Energy and Energy Efficiency (RCREEE), Ras Ghareb city council, Ras Ghareb community, Bedouin groups, New and Renewable Energy Authority (NREA), and other governmental parties; iii) a video conference introductory meeting with the selected EPC and WTG selected suppliers; iv) an in person meeting with the company, EPC and WTGs suppliers in AMEA headquarters, followed by an E&S workshop at the EPCs offices, both in Dubai on 27 and 28 July 2022; and v) a labor and working conditions audit, undertaken by an AWPC appointed consultant, to the WTG supplier facilities during October 2022.

Documents reviewed as part of the E&S appraisal included responses to an E&S questionnaire and  a review of: i) the Environmental and Social Impact Assessment (ESIA) of the Project and OHTL; ii) the Stakeholder Engagement Plan (SEP); iii) the Critical Habitat Assessment (CHA); iv) the Cumulative Effects Assessment (CEA); v) the Active Turbine Management Program (ATMP); vi) the Fatality Monitoring Program (FTP); vii) the bird migratory monitoring reports; viii) the Biodiversity Action Plan (BAP), which includes a feasibility study for offset options; and, ix) the security risk assessment (amongst others).

To characterize biodiversity risks in relation to the wind turbines' tip height, the E&S appraisal involved extensive consultation among IFC, the ESDD consultant, and the company ornithological experts. This included a review of the birds monitoring methodology, consultation with the bird migratory monitoring teams, a visit to the overlap area with IBA and consultation with Natural Conservation of Egypt (NCE), a representative of the Birdlife International for Egypt. A review of the Project impact in relation to the IBA and critical habitat assessment is described below under the PS6 section.

The contextual risk was appraised using IFC internal contextual risk screening tool. Contextual risks identified pertinent to this type of project and location included security risks, water availability, hunting and trapping of several species of resident and migratory birds, gender representation, labor policies and working conditions, and labor-related risks in the supply chain. Based on the findings of the contextual risk screening, particular attention was placed on the above-mentioned risks throughout the ESDD.

AWPC sponsors established early during the project development that AMEA environmental health and safety (EHS) policies, procedures and management systems would be adapted and implemented for the project, which it has, as described under PS1. Given AMEA is an existent IFC client, IFC's appraisal also considered their EHS performance on existing investments under current supervision (links to project disclosures below), where AMEA’s performance is currently 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
CHA_Amunet 500MW Wind Power Project.pdf
Draft_BAP_Amunet 500MW Wind Power Project.pdf
ESIA_Amunet 500MW Wind Power Project.pdf
OHTL_ESIA_ Amunet 500MW Wind Power project.pdf
SEP_Amunet 500MW Wind Power Project.pdf