IFC’s appraisal considered the environmental and social management planning process and documentation for the Project and gaps, if any, between these and IFC’s requirements. Where necessary, corrective measures, intended to close these gaps within a reasonable period of time, are summarized in the paragraphs that follow and (if applicable) in an agreed Environmental and Social Action Plan (ESAP). Through implementation of these measures, the Project is expected to be designed and operated in accordance with Performance Standards objectives.
PS1: Assessment and Management of Environmental and Social Risks and Impacts
Policy: At the Group level, a comprehensive set of publicly available E&S policies have been adopted including those related to environment, health and safety (EHS), human rights, diversity, stakeholder engagement and other governance related policies (https://www.indorama.com/sustainability). As a component of their ESMS, Indorama will adopt these policies, and refine as necessary, to be implemented at the site level.
Identification of Risks and Impacts: An ESIA for the project was commissioned by Indorama in 2024 and conducted as per the requirements of relevant Egyptian regulations, including the Egyptian Law for the Environment, and the IFC Performance Standards (PS). Key E&S impacts identified included dust and noise emissions during construction, occupational health and safety (OHS), increased road traffic, routine stack emissions, accidental release of ammonia, potential soil and groundwater contamination through the storage of phosphogypsum, hazardous waste, and handling of wastewater (these are documented further under the PS3 section of this document).
Following review of the ESIA, and refinement of the project design, an updated ESIA was commissioned in 2026 to address identified gaps and align with the requirements of IFC PS1. As per ESAP #1, the final ESIA will include: (i) updates to the hydrodynamic model for the proposed phosphogypsum storage site to assess potential impacts and inform design criteria, (ii) a site-specific flash flood assessment and modeling, and (iii) completion of a traffic baseline and impact assessment. Further, the company will obtain and maintain all necessary environmental, social and health & safety permits and authorizations
In addition to the above, as per ESAP #2, the company will update the Quantitative Risk Assessment (QRA) identifying potential risks associated with the transportation of liquid ammonia and the overall production facility. This will include the PAP, SAP and DAP/NPK, sulfur storage and potential transport modalities, namely, road tankers and a 13km pipeline from the Sonker storage terminal. Further, given the nature of the project, the QRA will also cover the cumulative risks posed by the operation as a whole, including identification and exclusion of offices, workshops and other similar locations within intolerable zones.
Indorama further plans to acquire a plot within an existing tank farm in Sokhna Port to construct two 15,000 MT phosphoric acid storage tanks for export purposes. Indorama will also construct one unloading arm at the port to sustain ammonia supply to the fertilizer plant. The unloading arm will connect to the 13 km ammonia pipeline. As per ESAP #3, Indorama will complete the required environmental risk assessment, Hazard Identification (HAZID), Hazard and Operability (HAZOP) study, and QRA for these project components prior to their construction and operation.
Lastly, as per ESAP#4, the company will complete a HAZOP assessment and a Layer of Protection Assessment (LOPA) to further inform the Project design. Similar process safety assessments will be done upon completion of the construction phase and prior to plant commissioning.
Management Programs: The E&S Management Plan (ESMP) developed as a component of the ESIA provides a framework for the necessary management plans required for specific construction and operational risks and impacts. As per ESAP#5, the company will develop the required management plans, including: (i) Transportation Management Plan, (ii) Noise Management Plan, (iii) Air Quality/Emissions Management Plan, (iv) Waste Management Plan (solid and hazardous), (v) Wastewater Management Plan, (vi) Emergency Preparedness and Response Plan (EPRP), (vii) Resource and Energy Efficiency Management and Monitoring Plan, (viii) Pollution Prevention and Spill Response Plan, (ix) Security Management Plan, and (x) Alien Species Management Plan.
As per ESAP#6, the Engineering, Procurement and Construction (EPC) contractor will be required to develop and implement a Construction Environmental and Social Management Plan (CESMP) and other relevant management plans prior to the commencement of construction activities. The CESMP will be aligned with both Indorama’s ESMS, local regulations and IFC’s Performance Standards.
Organizational Capacity and Competency: Commensurate to the nature of the anticipated project risks and impacts, the company will establish, maintain, and strengthen an organizational structure that defines roles, responsibilities, and authority to monitor and ensure implementation of the ESMS throughout the construction and operational phases. This will include employment, prior to the commencement of construction activities, suitably qualified and experienced EHS resources. At a minimum, this will include an Environmental Manager, Health and Safety Manager, and Human Resources (HR) manager (ESAP #7). Further, the company will ensure the preferred EPC contractor has the necessary EHS resources to adequately implement the CESMP and manage risks and impacts during the construction phase.
Monitoring and Review: As defined in the ESIA and per ESAP #8, Indorama will develop and adopt an appropriate E&S monitoring framework for both the operational and construction phases of the project. At a minimum, this will include (i) continuous monitoring of point source air emissions (including connection to the EEAA’s continuous monitoring network), (ii) ambient air quality, (iii) workplace air quality monitoring to determine worker exposure to hazardous materials and gases, (iv) workplace noise emissions, (v) heat stress monitoring, (vi) monitoring of waste production and disposal, (vii) water quality. Specific monitoring measures and protocols will be defined in the relevant management plans (ref. ESAP #5).
As per local legislative requirements, Indorama will also be required to develop an Environmental and Hazardous Waste Register, including permitting requirements, to track the environmental aspects of construction and operational activities.
Emergency Preparedness and Response: As a component of ESAP#5, the company will develop and implement an EPRP, which will include management procedures for fires, explosions, natural disasters, and climate change related impacts. Based on the QRA, LOPA and HAZOP assessment, (ref. ESAP#2 and #4), the company will further incorporate off-site emergency procedures, ideally in collaboration with the neighboring facilities and authorities, and cover potential incidents related to transportation of raw hazardous materials such as ammonia. The plan will also include exposure, leakage and spill hazards for hazardous chemicals such as ammonia, sulfuric acid, and phosphoric acid, among others.
As part of its contractor management plan (ref. ESAP#6), the EPC contractor will be required to develop and implement an EPRP specific to construction related risks and emergencies.
PS2: Labor and Working Conditions
Human Resources Policies and Procedures: It is estimated that the operation will employ approximately 500 workers during operations, comprising an 85% local workforce. During various phases of construction, the workforce is anticipated between 700 – 2300 workers. As per ESAP #7, the company will employ a project specific HR Manager prior to Project mobilization. Further, as per ESAP #9, the company will develop an integrated HR management system, including development of relevant policies and procedures, including, but not limited to, a Code of Conduct, Employee Handbook, Grievance Mechanism, Anti-Harassment Policy, Contractor Management Plan, Supply Chain Code of Conduct etc. All policies and procedures will be aligned with Egyptian labor law and IFC Performance Standard 2.
Labor and Working Conditions: Labor and working conditions for both direct and contract workers will be defined by the requirements of Egyptian labor law and, where relevant, sectoral collective bargaining agreements (CBAs). This will include requirements in relation to remuneration, working hours and overtime, leave, freedom of association, etc. As per the requirements of Egyptian Labor Law, all direct and contract workers will be provided with written contracts defining their terms of employment.
It is not anticipated that Indorama will provide worker accommodation during the operational phase of the project as most workers will be employed locally, and suitable accommodation is available in the area. It is likely that worker accommodation will be required by the EPC contractor during the construction phase. In this regard, as a component of ESAP #9, the Company will develop a Worker Accommodation Manual defining the minimum requirements and standards, aligned with the IFC / EBRD Guidance on Workers’ Accommodation. This will include requirements for temporary accommodation and any shared offsite accommodation.
Workers’ Organizations: As per the requirements of PS2 and local legislation, Indorama will recognize workers’ rights to form and to join workers’ organizations of their choosing without interference and to bargain collectively. This will be clearly defined in the relevant HR policies (ref. ESAP #9). Further, Indorama will ensure the EPC contractor also complies with this requirement for contract workers.
Grievance Mechanism: As per ESAP #9, Indorama will provide a grievance mechanism for all workers, including third parties (and their organizations, where they exist) to raise workplace concerns. The mechanism will involve an appropriate level of management and address concerns promptly, using an understandable and transparent process that provides timely feedback to those concerned, without any retribution. The mechanism will also allow for anonymous complaints to be raised and addressed.
Occupational Health and Safety: The nature of proposed operation can present certain OHS risks and hazards, hence as per ESAP#10, Indorama will develop an OHS Management Plan, and related standard operating procedures (SOP) to identify and manage potential operational OHS risks. This plan will include specific protocols and requirements related to health and hygiene, scaffolding, ladders, excavations, cranes and lifting, fall protection equipment, electrical safety, traffic safety, and defensive driving among others. The plan will further account for any hazardous activities carried out during commissioning of the facility such as high-pressure steam testing.
Indorama will ensure the plan includes an awareness and training program, an accident and investigation process, an emergency preparedness program, and adherence to general site rules. The OHS Management Plan will additionally include workplace exposure monitoring of identified chemicals through a risk assessment, including HF, SOx, NOx and acid fumes and Indorama will implement necessary measures to ensure compliance with GIIP.
Regarding operational phase, Indorama will conduct detailed HAZOP and LOPA for the various processes in all the plants within the facility (ref ESAP #4). The HAZOP and LOPA assessments will further inform the development of the OHS management and process safety plans to be developed as part of the ESMS.
Lastly, the CESMP developed by the EPC (ref. ESAP #6) will include the relevant OHS management requirements, aligned with Indorama policies and procedures. In this regard, the company will ensure that an inspection and auditing program is in place as part of its contractor management plan.
Workers Engaged by Third Parties: It is anticipated that Indorama will have multiple EPC contractors on site for the duration of the construction period, as well as several sub-contractors. During operations, it is anticipated the number of contractors will be reduced. In this regard, Indorama will develop, as per ESAP #5, a Contractor Management Plan defining: (i) the vetting and procurement process, (ii) inclusion of E&S contractual clauses, (iii) management and monitoring of third-party contractors’ E&S performance as per Indorama’s ESMS, and (iv) contractor access to an appropriate grievance mechanism
Supply chain: Indorama will source the major raw material, phosphate, from the existing Red Sea Mines operated by Misr Phosphate. Based on IFC’s appraisal, the supplier has a mature EHS management system in place. Other raw materials, such as sulfur and ammonia will be sourced either locally or from the international market.
As per ESAP #11, the company will develop a supply chain management system (SCMS). The SCMS should include as a minimum: (i) a procurement policy and supplier code of conduct that addresses labor and working conditions in accordance to the national law and significant workplace and community health and safety issues as per IFC PSs; (ii) inclusion of contractual clauses requiring suppliers’ compliance with the code of conduct; (iii) a verification process to ensure new suppliers have the policies and procedures in place to meet requirements of the code of conduct; (iv) a communication strategy to inform suppliers about the code of conduct; and (v) a formal process for supplier engagement, remedy or disengagement in case of non-compliances that are not addressed.
PS3: Resource Efficiency and Pollution Prevention
Resource Efficiency and Greenhouse Gases: The operation is expected to require a maximum of 30MW of power which will predominantly be sourced via captive heat recovery from the sulfuric acid production process, meeting 90% of the energy requirements. The remaining 10% will be sourced from the national grid. Additionally, the facility will use natural gas for the drying of fertilizer with an estimated consumption of 7.5 million m3 annually. The facility will connect to the existing electricity and gas supply network within the SC Zone. It is anticipated that a minimal amount of diesel will be required for back-up generators.
As part of the ESIA, Indorama undertook a greenhouse gas (GHG) emission estimation, calculating values for Scope 1, 2 and 3 emissions. The facility is expected to produce ~21,586 tons CO2eq per annum (tCO2e/y) in terms of Scope 1 and 2 emissions and further avoid around 101,830 tCO2e/y through the captive heat recovery process. As per ESAP #5, Indorama will develop and implement a Resource and Energy Efficiency Management and Monitoring Plan to monitor resource consumption across all activities and develop energy efficient measures to further reduce fuel consumption and GHG emissions.
Air Emissions and Ambient Air Quality: Air emissions from the facility will primarily include: (i) emissions from the PAP, mainly hydrogen fluoride (HF) and particulates; (ii) sulfur oxides (SOx) from the SAP; and (iii) fugitive emissions of particulates and ammonia from the DAP/NPK plant.
The PAP will be equipped with a wet scrubber to recover HF in the form of fluorosilicic acid, which will be sold in the local market. An air emissions modeling study indicates that HF emissions are expected to remain below the maximum permitted limit, in compliance with the WBG EHS guidelines for Phosphate Fertilizer Manufacturing. The SAP will feature a double contact double absorption system with high-efficiency catalytic converters, ensuring over 99% conversion of SO2. SO2 emissions are estimated to be lower than the maximum permitted limit. For the DAP/NPK plant, emission control measures will include cyclones and wet scrubbers, effectively reducing emissions to acceptable levels.
As part of the air emission control and monitoring measures, all major emission sources will be equipped with continuous emission monitoring systems, in addition to regular third-party independent emission monitoring. Indorama will also establish an air emission and ambient air quality monitoring plan (ref. ESAP#5) in line with WBG EHS guidelines. Air emissions from construction activities will mainly be from dust due to earthworks and vehicle traffic on unpaved access roads. This will be controlled via application of the associated CESMP (ref. ESAP#6). Based on the plant design and proposed management measures, it is anticipated that air emissions will comply with both local regulatory requirements and WBG EHS emission limits.
Water Consumption: It is estimated that the operation will require 13,500 m3/day of water for process and domestic use. This will be supplied via the SC Zone water network, where water is sourced from an existing desalination plant with a capacity of 100,000 m³/day and specifically designed to support industrial activities. If necessary, the water will be pre-treated before being used as process and cooling water. As part of its Resource and Energy Efficiency Management and Monitoring Plan (ref. ESAP#5), the company will identify and implement measures to minimize water usage.
Wastewater Treatment: The primary effluents generated by the facility will come from gas scrubbers, boiler blowdown, cooling towers, the raw water treatment plant, and sanitary wastewater. The facility is designed as a zero-process effluent discharge operation, ensuring that all effluents, except for sanitary wastewater, are recycled within the process. Effluent from scrubbers will be reused in the process, while boiler blowdown and effluent from the water treatment plant will be directed to the cooling towers. The generated wastewater will be primarily treated and recycled back into the PAP. Sewerage will be collected in insulated septic tanks and emoted through a licensed contractor for transferring wastewater to the nearest wastewater treatment unit, while domestic wastewater will be discharged into the public sewer system.
Noise Management: Key noise sources at the operation will be the boiler, turbines, captive power plant, pumps etc. Due to the location of the project, the ESIA does not anticipate material ambient noise impacts, however, workplace noise will need to be monitored and managed to comply with local legislation and WBG EHS Guidelines. In this regard, as a component of their OHS Management Plan (ref. ESAP #10), Indorama will ensure mandatory and relevant PPE is provided to all workers at the plant. Noise mitigation and monitoring measures will be defined in the Noise Management Plan (ref. ESAP #5).
Hazardous Materials and Process Safety Management: Due to the nature of the operation, the facility will include the use and storage of various hazardous materials, such as ammonia, sulfur, sulfuric acid, hydrofluoric acid and others. Indorama will adopt good industry practices in designing storage facilities for these hazardous materials and will ensure proper maintenance during the operation phase. The design and operation of these storage facilities will be further informed by a HAZOP assessment, LOPA and QRA as required under ESAP #2. As part of its ESMS, the company will also develop and implement a Hazardous Materials Management Plan (ref. ESAP#5).
Phosphogypsum is typically not classified as hazardous unless high fluoride content is present, hence Indorama may sell it to the local construction industry. The phosphogypsum will be stored at a site adjacent to the facility. In this regard, as per ESAP#12, Indorama will (i) investigate measures to reduce the phosphogypsum generation rate (e.g. through process optimization) to achieve the industry benchmarks, (ii) carry out regular monitoring of the phosphogypsum for any hazardous and radioactive properties and thereafter take actions as needed to manage and dispose the phosphogypsum as hazardous waste, as per the Waste Management Plan (ref. ESAP #5). If such determination is made through monitoring, (iii) design and construct an appropriate lining and leachate collection system in line with good industry practices (based on hydrodynamic modelling - ref. ESAP #1), (iv) develop a Radon Monitoring and Management Plan, and (vi) develop and implement a groundwater and soil monitoring protocol to detect any potential contamination.
Waste Management: The ESIA outlines the various types of waste anticipated during construction and operation and provides guidance on their safe handling, storage, and disposal. Both hazardous and non-hazardous waste will be managed through government-approved certified contractors, with the exception of phosphogypsum which is expected to be produced by the PAP. As per ESAP#5, the company will develop and implement a Waste Management Plan.
PS4: Community Health, Safety and Security
Community Safety: Indorama’s proposed operation is located within the SC Zone, with the nearest residential area approximately 4.5 km east of the site. While community safety risks are deemed limited, the nature of the operation can pose various safety risks that require appropriate management. The QRA conducted for the 10,000 MT ammonia storage unit determined that the risk of fatalities from an ammonia release is confined within the site boundary, while the risk of injuries extends up to 1km from the release source, however within the industrial zone limits. Since the site is located within an industrial zone, the impact of ammonia release on residential areas is expected to be negligible.
As per ESAP#2, the QRA will be updated to further assess the risks related to the ammonia transportation including the ammonia pipeline as well as other risks such as fire, explosion, accidental release related to the overall production facility in line with good international industry practice and will include hazard identification, frequency assessment, consequence assessment and risk assessment in the form of iso-risk contours/impact zones and significance of the risks.
Transportation: The nature of Indorama’s operations will result in extensive trucking for the transport of raw materials such as sulfur and phosphate rock from the Sokhna port and Red Sea Mines respectively, and transport of fertilizer products to Sokhna port, approximately 3km from the site, or other ports, for export purposes. Further, while the company plans to utilize an ammonia pipeline for the transport of liquid ammonia, this may be supplemented using specialized road truckers. In this regard, as per ESAP#1, the Company will complete a detailed traffic baseline and impact assessment and based on the findings develop and adopt a Traffic and Transportation Management Plan (ref. ESAP #5). This will include, at a minimum, (i) safety screening based on the specific risk related to each transported material; (b) appropriate parking, loading, and unloading processes; and (c) training in plant safety rules, road safety, defensive driving and emergency response procedures for drivers. In addition, as per ESAP#2, the updated QRA will also include safety risks in relation to the use of tankers for the transport of liquid ammonia to ensure it is maintained as low as possible.
Security Management: As noted, Indorama’s proposed operation will be based in the SC Zone, where the management authority is responsible for the provision and oversight of security, including access control, guards, patrols etc. Indorama will, on a best effort basis, engage and coordinate with the SC Zone on security related matters. In addition, the Company will implement their own security provisions, including the procurement of a private third-party security provider. In this regard, as per ESAP #5, the Company will complete a security risk assessment and develop and implement an associated Security Management Plan, including prescriptions for guard selection, rules of engagement (including minimum force), training, equipment, facilities, working conditions, grievance mechanism and others.
