The Company is a greenfield Egyptian company incorporated in 2007 for the sole purpose of carrying out this Project. It is owned 82% by Orient Investment Properties Limited (“Orient”), 15% by EGPC and 3% by other investors. The Project’s main sponsor is Citadel Capital S.A.E. (“Citadel” or the “Sponsor”), a leading Cairo-based private equity firm founded in 2004. Citadel, together with co-investors, established Orient to invest in ERC and serve as the investment vehicle for the Sponsor’s oil refining activities in the Middle East and North Africa region. ERC is Orient’s first project. EGPC is GOE’s petroleum arm responsible for the development of Egypt’s upstream and downstream oil industry, including ensuring the supply of various refined petroleum products within Egypt. EGPC owns and operates all of Egypt’s nine existing refineries.

The total project cost is estimated to be approximately $3.6 billion. The Project will be financed on a 64/36 debt/equity basis ($2.3 billion in debt and $1.3 billion in equity and subordinated contractor loan financing). IFC is proposing up to a $100 million equity investment in Orient, the Company’s main shareholder.

120.0 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan
Equity	120.0

* These investment figures are indicative

The Project is to be located on the outskirts of Cairo, on the Ismailia canal in the Mostorod District, adjacent to the existing CORC refinery. The site is in a highly populated urban area, but the Project will be located within the walls of an existing petroleum complex. The processing facilities will occupy approximately 323,000 square meters to the South of the CORC refinery.

The Project will help optimize the domestic production and distribution of low sulfur refined products, address increasing fuel demand within the country, particularly in the Greater Cairo area, and generate savings for the GOE through the substitution of higher-cost imports. Environmental benefits will also materialize through upgrades of existing facilities and the production of ultra-low sulfur diesel. During construction and operation of the refinery the main benefits include: (i) Employment: Approximately 10,000 jobs created during construction (at peak) and 700 direct permanent jobs during operations in addition to the other services that are expected to flourish around the Project. (ii) Benefits to GOE: In addition to tax revenues, the GOE will benefit through a carried interest in the Project, a price discount on diesel produced by the Project, savings on logistics for imports, and additional revenues for CORC and other state-owned companies for services rendered to ERC. (iii) Environmental Upgrades and Benefits: ERC has agreed to implement, at its own cost, a series of environmental upgrades to the existing site, CORC and the storage facilities of the adjoining state-owned PPC. The upgrades are expected to lead to significant improvements to local air and water quality as they will involve soil decontamination, installation of low nitrogen oxide burners and of a tertiary waste water system at CORC. In addition, with the start of ERC operations, CORC will switch to using natural gas exclusively for internal energy needs, away from high sulfur fuel oil. This is expected to reduce cumulative sulfur dioxide emissions in the area surrounding ERC significantly. More broadly, potential environmental benefits of the Project will come from the supply to the GOE of ultra low sulfur diesel, which has significantly lower sulfur content than diesel currently produced in Egypt, at lower cost than alternative imports. This will therefore give GOE a low cost option to reduce the average sulfur content of locally consumed diesel and thereby the level of sulfur dioxide emissions in Egypt. (iv) Community Impacts: Community Development Centers will be established to offer a variety of community services, including employment/skills training, literacy, health and other life skills education programs and healthcare support. ERC is expecting to invest over US$5 million in community investment during the construction period. The key development indicators that are proposed to be monitored during the life of the IFC investment are: - Employment (# of jobs during construction and during operations) - Implementation of environmental upgrades to CORC/PPC and soil remediation (US Dollars spent) - Reduction in sulfur dioxide emissions in Mostorod area (% decrease from baseline) - Payments to GOE (US Dollars) - National Purchase of Goods and Services (US Dollars) - Community Development Outlays (US Dollars)

(i) Environmental and Social Expertise: The Project will have a significant social impact both during its long construction period (4-5 years) as well as during its operation, given its proximity to local populations. IFC will provide vital support in helping the Company design and implement its community engagement strategy in order to maximize positive social impact projects. Among other projects, the Company is planning to train over 2,000 local community members over the next 2 years, establish community development centers, and maximize sourcing from local SMEs. IFC will also play an important role in monitoring the social and environmental benefits of the Project; (ii) Financing and Mobilization: The Project is the largest project financing in Egypt’s history, with over US$1 billion equity to be raised from investors. Given current liquidity constraints, IFC’s potential investment will help complete the Project’s funding needs and provide additional comfort to both current and new investors on the economic fundamentals of the Project; and (iii) Political Risk Mitigation: Given the strategic nature of the petroleum sector in Egypt, IFC’s presence in Orient’s shareholder group will provide important additional political risk mitigation. As part of the World Bank Group, IFC can play a vital role as neutral party between shareholders and GOE.

The new ERC facility will be constructed within an existing industrial area but because the industrial area is within a densely populated urban area, the Project has been designated as Category A according to IFC’s environmental and social review procedure. This is primarily due to the potential for disturbance to the local communities during the Project’s construction phase which will last for around 4 years with an expected workforce of up to 10,000 people during peak construction periods. During construction, increased transportation requirements, noise and dust, and the need for additional equipment lay-down areas close to community areas will contribute to cumulative impacts in the existing area. The Project has plans to manage these impacts in accordance with international good practice so that local disturbance is minimized. The construction program will also provide much needed positive benefits to the local population in relation to jobs and training.

Once in operation, the Project will be a state-of-the-art facility that will utilize best available technology. In addition, overall cumulative impacts in the area will be reduced as a result of the environmental upgrades to be provided by ERC to existing facilities in the industrial zone.

Information about potential environmental and social impacts and how they will be addressed by the company is summarized in the Environmental and Social Review Summary.