SFG1794 V2 Public Disclosure Authorized

Environmental and Social Due Diligence

Public Disclosure Authorized of New Capital Power Plant Prepared by:

Integral Consult©

Cairo Office: Doha Office: 2075 El Mearaj City, Ring Road, 6th Floor Al Mana Tower B, Al Maadi – Cairo – Egypt Sadd, C-Ring Road, P.O Box. Phone +202 2 25204515 55781 Fax +202 2 25204514 Phone: +974 4466 4203, +974 4455 0483

Public Disclosure Authorized Fax +974 4466 7843 Email: [email protected] www.integral-egypt.com

A Member of

Environmental Alliance October, 2016 Public Disclosure Authorized DUE DILIGENCE

Environmental and Social Due Diligence of New Capital Power Plant

 Integral Consult

Cairo Office: 2075 El Mearaj City, Ring Road, Maadi – Cairo - Egypt Phone +202 25204515 • Fax +202 25204514

Doha Office: 6th Floor Al Mana Tower B, Al Sadd, C-Ring Road, P.O Box. 55781 Phone: +974 4466 4203, +974 4455 0483 Fax +974 4466 7843

Email: [email protected]

Environmental and Social Due Diligence for New Capital Power Plant i Table of Contents 1. Executive Summary ...... 1 1.1 Scope and purpose of review...... 1 1.2 Methodology ...... 2 1.3 Status of requested project documentation...... 2 1.4 Power plant status ...... 3 2. Project Description ...... 4 2.1 Site Description ...... 4 2.2 Technical Description...... 6 2.3 Supplying Natural Gas Pipelines ...... 6 3. Summary of Due diligence activities ...... 8 3.1 Meetings ...... 8 3.2 Desk Review ...... 9 3.3 Site Visits ...... 10 4. Power plant compliance with World Bank/IFC Performance standards...... 11 4.1 PS 1- Assessment and Management of Environmental and Social Risks and Impacts...... 11 4.1.1 Policy...... 11 4.1.2 Identification of risks and impacts ...... 11 4.1.3 Management programs ...... 11 4.1.4 Organizational capacity and competency...... 12 4.1.5 Emergency preparedness and response...... 12 4.1.6 Monitoring and review ...... 12 4.1.7 Stakeholder engagement...... 13 4.2 PS 2- Labor and Working Conditions ...... 13 4.2.1 Working Conditions and Management of Worker Relationship...... 13 4.2.2 Occupational health and safety management...... 13 4.2.3 Grievance mechanism...... 14 4.2.4 Communication and training...... 14 4.3 PS 3- Resource Efficiency and Pollution Prevention...... 14 4.3.1 Waste disposal...... 14 4.3.2 Air emissions ...... 15

Environmental and Social Due Diligence for New Capital Power Plant ii 4.3.3 Noise emissions ...... 16 4.3.4 Water supply ...... 16 4.3.5 Wastewater discharge ...... 16 4.3.6 Hazardous waste management...... 17 4.3.7 Energy conservation ...... 17 4.3.8 Water conservation ...... 17 4.3.9 Contaminated land ...... 17 4.4 PS 4- Community Health and Safety ...... 18 4.4.1 Spill control and management ...... 18 4.4.2 Structural safety of project infrastructure...... 18 4.4.3 Traffic safety...... 18 4.5 PS 5- Land Acquisition and Involuntary Resettlement ...... 19 4.5.1 Land acquisition...... 19 4.6 PS 6- Biodiversity Conservation and Sustainable Management of Living Natural Resources ...... 19 4.7 PS 7- Indigenous People...... 19 4.8 PS 8- Cultural Heritage ...... 20 4.9 WBG EHS Sector Guidelines for Thermal Power Plants...... 20 4.9.1 Mitigation of air emissions...... 20 4.9.2 Energy efficiency and GHG emissions ...... 20 4.9.3 Thermal discharges...... 21 4.9.4 Solid wastes...... 21 4.9.5 Hazardous materials and oils ...... 21 4.9.6 Noise ...... 21 4.9.7 Occupational health and safety...... 22 4.9.8 Monitoring emissions ...... 22 4.10 WBG EHS General Guidelines...... 22 4.10.1 Environmental ...... 22 4.10.2 Occupational health and safety...... 23 4.10.3 Community health and safety...... 23 4.10.4 Construction and decommissioning ...... 23 4.11 Summary of the Environmental and Social Findings ...... 24

Environmental and Social Due Diligence for New Capital Power Plant iii 5. Power plant compliance with national regulations ...... 25 6. Conclusions and recommendations ...... 29 Annex (1) Approvals for NCPP...... 30 Annex (2) Soil and Groundwater Analysis ...... 41 Annex (3) Environmental Practice Documents...... 42 Annex (4) Land Allocation Letter and handover meeting Minutes...... 60 Annex (5) Meetings and Site Visit MOM ...... 67

Environmental and Social Due Diligence for New Capital Power Plant iv List of Figures Figure 1 The location of New Capital Power Plant...... 4 Figure 2 Cairo New Capital power plant layout and boundaries...... 5

Environmental and Social Due Diligence for New Capital Power Plant v List of Tables Table 1 Summary of the reviewed documents...... 2 Table 2 Coordinates of the power plant’s land...... 5 Table 3 Comparison of air emissions between turbine design and WB limits ...... 20 Table 4 Summary of the Environmental and Social findings ...... 24 Table 5 EEAA approval compliance status...... 25 Table 6 Recommended Corrective Action Plan ...... 29

Environmental and Social Due Diligence for New Capital Power Plant vi List of Abbreviations CEPC Cairo Electricity Production Company CTG Combustion Turbine Generator DA Degraded Air shed EEAA Egyptian Environmental Affairs Agency EEHC Egyptian Electricity Holding Company EHS Environmental Health and Safety EIA Environmental Impact Assessment EMS Environmental Management Staff ESAP Environmental Social Action Plan ESIA Environmental and Social Impact Assessment ESMS Environmental and Social Management System HRSG Heat Recovery Steam Generator IFC International Finance Cooperation LRAP Livelihood Restoration Action Plan LFO Light Fuel Oil MHPUNC Minister of Housing, Public Utilities & New Communities MOM Minutes of Meeting MWe Mega Watt electrical NCPP New Capital Power Plant NDA Non-Degraded Air shed OHTL Over Head Transmission Line OP Operational Policy PS Performance Standard PMU Project Management Unit WB World Bank WBG World Bank Guidelines CO Carbon Monoxide NO2 Nitrogen Dioxide

Environmental and Social Due Diligence for New Capital Power Plant vii 1. EXECUTIVE SUMMARY

1.1 Scope and purpose of review

The Egyptian government is currently increasing the power generation capacity in the country. Therefore, a new power plant is constructed at New Capital. This power plant is within an agreement between Egyptian Electricity Holding Company (EEHC) and Siemens AG to construct and operate three combined cycle power plants of 4,800 MW each at Beni Suef, El Burullus and New Capital.

Cairo Electricity Production Company (CEPC), a company affiliated to EEHC proposed to locate New Capital Power Plant (NCPP) at a selected site at the north of the Cairo / Ain Sokhna Freeway at a distance of around 50 Km from Cairo and 60 Km from Ain Sokhna. Currently, the nearest residential area to the power plant is Madinaty Compound at a distance of around 20 Km. However, other residential compounds are planned to be constructed at distances varying from 5-15 Km. The site is within an existing piece of land allocated to the CEPC by the Cabinet of Ministers according to decree 60/09/15/19 issued during the meeting on 10/9/2015, after the approval of the Armed forces.

The NCPP will utilize natural gas as its primary fuel to generate 4,800 MW by a combined cycle mode. The construction activities of the power plant started in July 2015. The power plant is intended to be partially operational in open cycle mode by the middle of 2017 and fully operational in Combined Cycle mode by mid-2018.

One of the other projects implemented to support the generation of electricity in Egypt is the EG-Giza North Power Project, which was financed by the World Bank. After the completion of the procurement of all the packages financed by the World Bank, there were financial savings available as part of the project to be utilized by the Government of Egypt. The World Bank received formal requests from the government of Egypt to utilize the financial savings of Giza North Power Plant project to procure natural gas pipelines in order to upgrade the natural gas network. One of these pipelines is Sumid import gas pipeline, which will feed NCPP. One of the World Bank requirements is to undertake an environmental and social due diligence to any associated facility to a bank- assisted project to ensure that they are conforming to the World Bank/IFC Performance Standards. NCPP is considered as an associated facility to Sumid import gas pipeline project since it meets the following World Bank criteria for the identification of the associated facilities.

 Directly and significantly related to the Bank-assisted project (Sumid import gas pipeline project)

Environmental and Social Due Diligence for New Capital Power Plant 1  Necessary to achieve the objectives of the Sumid import gas pipeline as set forth in the project documents; and

 Carried out contemporaneously with the Sumid import gas pipeline project

This report was undertaken to check and identify the current and cumulative environmental and social impacts of the power plant. Moreover, it is required to ensure that the proposed/implemented environmental and social mitigation measures, including monitoring and reporting requirements are satisfactorily conforming to World Bank/IFC Performance Standards (taking into consideration that the project is financed through KfW IPEX-Bank GmbH which is a commercial bank). Accordingly, corrective measures are proposed when required.

1.2 Methodology

In order to achieve the due diligence objectives, the work methodology followed included conducting meetings with the relevant entities to gather the available data and documents related to the power plant, conducting desk review for the relevant project documents, in addition to conducting a visit to the power plant site. The desk review was done to evaluate all the gathered documents and studies prepared for the power plant. On the other hand, a site visit to the power plant was conducted on June, 16th 2016 to check and assess the environmental and social conditions during the construction phase.

1.3 Status of requested project documentation

The following table summarizes the documents reviewed by due diligence consultant.

Table 1 Summary of the reviewed documents

Source Reviewed Document EEHC 1. ESIA of the power plant - ESIA main document - QRA volume 2. EEAA approval for the power plant 3. Cabinet of Ministers’ land allocation Decree 4. August 2016 updated Environmental and Social Action Plan (ESAP) 5. Soil and Ground water Investigation report 6. Coordination minutes of meeting with the Ministry of Housing and Utilities regarding the water connections 7. Occupational Health Management Plan Site visit 1. Waste Management Plan by Orascom (the main contractor) 2. Water and Wastewater Management plan by

Environmental and Social Due Diligence for New Capital Power Plant 2 Orascom 3. Land handover meeting minutes between the Ministry of Defence and EEHC 4. Waste disposal log 5. Waste oil disposal receipts 6. Hazardous waste disposal receipts 7. Traffic management plan by Orascom 8. Environmental and social action plan (ESAP) (Updated July 2016) 9. Environmental and social sustainability policy 10. Air and noise reports done in January

1.4 Power plant status

Based on the conducted assessment of the power plant, the due diligence team concluded that NCPP is considered to be in compliance to World Bank/IFC Performance Standards. None of the comments found throughout the study may pose any environmental or social threats on the successful construction and operation of the power plant. However, the following recommendations need to be considered:

- Adding dust as a parameter to the air quality reports during the construction activities.

- Specifying the exact landfills that the project will dispose its hazardous and non- hazardous wastes during operation phase and finalizing the contractual agreements with them.

Environmental and Social Due Diligence for New Capital Power Plant 3 2. PROJECT DESCRIPTION

2.1 Site Description

Cairo Electricity Production Company (CEPC) proposed to locate New Capital Power Plant (NCPP) at selected site at the north of the Cairo / Ain Sokhna Freeway. The distance from the location of the power plant to Cairo and Ain Sokhna is approximately 50 and 60 Km, respectively. Currently, the nearest residential area to the power plant is Madinaty Compound at a distance of around 20 Km. However, other residential compounds are planned to be constructed at distances varying from 5-15 Km. The power plant will be located on an area of about 744,811 m2.

The site is within an existing piece of land allocated to the CEPC by the Cabinet of Ministers according to decree 60/09/15/19 issued during the meeting on 10/9/2015, after the approval of the Armed forces.

Figure 1 shows the location of NCPP, while Figure 2 shows the power plant layout and boundaries.

Figure 1 The location of New Capital Power Plant

Environmental and Social Due Diligence for New Capital Power Plant 4 Figure 2 Cairo New Capital power plant layout and boundaries

The power plant land is determined by the coordinates shown in the following table:

Table 2 Coordinates of the power plant’s land

Point Latitude Longitude NCPP 1 29°54'37.83"N 31°45'45.39"E NCPP 2 29°54'42.84"N 31°44'55.52"E NCPP 3 29°54'24.96"N 31°44'52.64"E NCPP 4 29°54'20.30"N 31°45'42.57"E

As shown in Figure 1, the power plant is located in a highly arid desert. The site is not located near any protectorates as the nearest protectorate is the Hassana Dome (Kobbet El-Hassana) scientific protectorate in Giza Governorate, which is 75 km away from the project site.

As mentioned above, the construction of the power plant will not include any land acquisition as the site location was allocated to CEPC through the Cabinet of Ministers according to decree 60/09/15/19 issued during the meeting on 10/9/2015, after the approval of the Armed forces. The original ownership of the land belonged to the Ministry of armed forces, as it is the operator of the Cairo / Ain Sokhna Freeway and has the ownership of 2 km in each direction around the road. In addition, and due to the absence of any human activities that will be negatively affected by the power plant construction and operation, no livelihood restoration action plan is required.

Environmental and Social Due Diligence for New Capital Power Plant 5 2.2 Technical Description

The overall generating capacity of NCPP will be 4,800 MWe as it will consist of four modules; each module is composed of two gas turbine units of 400 MWe capacity and a steam turbine unit of 400 MWe capacity. The power plant will be firing natural gas as a primary fuel and diesel oil (light fuel oil) as an emergency fuel. The natural gas will be supplied to the power plant through underground pipelines while the emergency diesel oil will be transported by trucks from Mustorod or Suez oil refineries.

The combined cycle power plant will consist of eight combustion gas turbines generators (CTG); each of capacity 400 MWe, eight heat recovery steam generators (HRSG) and four steam turbines generators; each of capacity 400 MWe. The power plant will operate on an air-cooled condenser system. The required water for service and HRSG will be supplied through Cairo water network / 10th of Ramadan water network and will be used after pre-treatment and demineralization in the HRSG system. A wastewater treatment facility on the site will treat wastewater streams (both industrial and Sewage effluents) and produce an effluent suitable for discharge into the plantation irrigation system and/or the Cairo sewer system.

The natural gas will be combusted in the gas turbines generating electricity and hot gases which will be directed to the HRSG system. The hot gases will boil the demineralized water in the HRSG producing steam which will generate electricity in the steam turbines generators. The exhaust steam from the steam turbines will be directed to a condenser which is cooled by an air cooling system then recirculated to the HRSG. The generated electricity will be fed to the national unified grid via a 500 kV switchgear to the 500 Kv Over Head Transmission Line (OHTL) network.

Since the Cairo New Capital area is vulnerable to earthquakes, the power plant is designed and constructed to conform to Uniform Building Code Zone seismic criteria, according to US regulations for earthquake. The power plant has also been designed to comply with the international code of the National Fire Protection Authority (NFPA), which requires particular specifications for fire protection.

2.3 Supplying Natural Gas Pipelines

It is planned that the New Capital Power Plant should start operation with natural gas as the main fuel by the end of 2016. To achieve this goal, GASCO is currently constructing the supplying gas pipeline coming from Ain Sokhna N.G. pipeline, which will end at the Pressure Reduction Station in New Capital Power Plant.

Additionally, as a method to guarantee the stability of the N.G. supply, GASCO is planning to construct an import gas pipeline overlooking the Red Sea (Sumid pipeline). This is the main pipeline to which the New Capital power plant is considered as an

Environmental and Social Due Diligence for New Capital Power Plant 6 associated facility. This line starts from an import point near the seashore and ends at an existing valve room inside Sumid company land.

Environmental and Social Due Diligence for New Capital Power Plant 7 3. SUMMARY OF DUE DILIGENCE ACTIVITIES

In order to achieve the due diligence objectives, the work methodology followed included conducting meetings with the relevant entities to gather the available data and documents related to the power plant, conducting desk review for the relevant project documents, in addition to conducting a visit to the power plant site. The desk review was done to evaluate all the gathered documents and studies prepared for the power plant. On the other hand, a site visit to the power plant was conducted on June, 16th 2016 to check and assess the environmental and social conditions during the construction phase.

3.1 Meetings

Three meetings were held with EEHC at different phases of the due diligence project. The detailed minutes of meetings can be found in annex 5 of the study, while this section contains a summary of the meetings findings.

The first meeting was held on 9/5/2016 for the purpose of gathering the available data and documents related to the 7 power plants fed by the natural gas pipelines financed by the World Bank (including NCPP). During the meeting EEHC ensured that all the power plants have already obtained the environmental approval from the Egyptian Environmental Affairs agency. Also, the social status of the power plants regarding the land acquisition aspect was discussed, and an agreement was made that EEHC will send to the due diligence consultant the EEAA approvals, lender approvals, land ownership documents, Beni Suef livelihood restoration action plan once finalized, and the contact details of the focal points inside the electricity production companies to get more specific data about each power plant.

The second meeting was held on 24/5/2016 for the purpose of gathering the available data and documents related to Cairo New Capital, El Burullus and Beni Suef Power Plants. In the meeting, a discussion was held regarding the ESIAs prepared for the three power plants. The due diligence team met the consultant undertaking the social studies and the social status of the power plants regarding the land acquisition was discussed. The due diligence team was ensured that the required permits for constructing and operating the power plants will be sent..

The third meeting was held on 29/9/2016 for the purpose of discussing the status of the documents requested from EEHC. In this meeting, the due diligence consultant explained the list of the required information and the EEHC representative committed to supply the data that he can get within a week.

Environmental and Social Due Diligence for New Capital Power Plant 8 3.2 Desk Review

The due diligence activities included reviewing the national legal requirements pertinent to the construction and operation of power plants in Egypt. In addition to that, the World Bank requirements concerning the environmental limits and standards were investigated as well as the social requirements.

(i) Power Plant ESIA Study The current project proponent is the Egyptian Electricity Holding Company (EEHC). The power plant is a 4,800 MW capacity combined cycle power plant, with the co- ordinating initial mandated lead arrangers (the “CIMLAs”) being the Deutsche Bank AG, HSBC Bank Middle East Limited and KfW IPEX-Bank GmbH. The CIMLAs aim is to raise three loan facilities to partially finance the Projects. One of the supporters is the German ECA Euler Hermes Aktiengeselleschaft on Behalf of the German Government (“Hermes”)

The ESIA is prepared by independent experts not affiliated with the project in accordance with the national regulations and requirements, and the requirements of the World Bank/IFC Performance Standards and IFC EHS guidelines as well as the Equator principles (2013). The study has been presented and accepted by the EEAA.

(ii) Applicable Egyptian laws and regulations The Environmental Egyptian Law 4 of 1994 amended by Laws 9/ 2009 and 105/2015 (with its executive regulations amended by Decree 1095/2011, 710/2012 and 964/2015) specifies the applications for a license for any project. According to the law, a full EIA must be prepared for the power plant and submitted to Egyptian Environmental Affairs Agency (EEAA) for consideration.

The executive regulations of the environmental law specifies the limits for different environmental aspects as ambient air quality, air emissions from the power plants’ stacks during operation, management of hazardous and non-hazardous solid wastes, ambient noise levels, air and noise quality in the work environment and wastewater discharge regulations to aquatic or marine environments.

According to the guidelines issued by the EEAA for the preparation of the EIA studies, Power Plants are categorized as facilities under Category “C”, which requires the preparation of a full EIA study.

(iii) Applicable World Bank regulations Taking into consideration that NCPP is financed through a consortium of commercial banks (including KfW IPEX-Bank GmbH, HSBC bank..etc.), the World Bank/IFC Performance Standards were followed in the process of reviewing the ESIA study underhand as well as the IFC’s General Environmental, Health and Safety (EHS) Guidelines and the EHS Guidelines for Thermal Power Plants.

Environmental and Social Due Diligence for New Capital Power Plant 9 3.3 Site Visits

A site visit was carried out by the due diligence team to the power plant site, currently under construction, to collect more information and check the documents related to the current situation of the power plant. The details of the site visit proceeding are included in Annex (5) of the study, and a brief about the main activities is included below.

During the visit which was carried on 16/6/2016, the due diligence team mainly met with “Orascom” representatives (the main contractor) onsite, and the environmental practices of the power plant were discussed, and supporting documents were obtained. Also a tour through the plant was carried out, and the construction progress to date was discussed.

Environmental and Social Due Diligence for New Capital Power Plant 10 4. POWER PLANT COMPLIANCE WITH WORLD BANK/IFC PERFORMANCE STANDARDS

This section includes the assessment of environmental and social aspects against the World Bank/IFC Performance Standards and Guidelines.

4.1 PS 1- Assessment and Management of Environmental and Social Risks and Impacts

The prepared ESIA for the power plant is generally complying with the World Bank/IFC requirements of PS 1 as shown in the following sub-sections:

4.1.1 Policy

Based on the ESAP prepared for the power plant, an environmental and social policy was issued for the power plant and finalized by the end of May 2016. Additionally, during the site visit the due diligence team obtained environmental and social policy from Orascom (the main contractor). The due diligence team concludes that this matches with the requirements of PS 1.

4.1.2 Identification of risks and impacts

The ESIA presents a thorough identification of environmental and social risks and impacts. The due diligence team concludes that this matches with the requirements of PS 1.

4.1.3 Management programs

The ESIA presents a management program that describes mitigation and monitoring measures that will be applied for each defined risk and impact. In the provided ESAP, the Environmental and Social Management System (ESMS) components were identified including actions that are marked as already closed actions. These include the policy, emergency response plan for the construction phase and stakeholders engagement plan. Other still open actions are also included such as the emergency response plan for the commissioning and operation phases and the implementation of the stakeholder engagement plan.

Additionally, an overarching project management programme/plan was mentioned to have been finalized for the construction phase describing the company’s approach to management and mitigation measures, including: avoidance, mitigation, compensation plans and adaptation processes. Also, a final version of an overarching project management programme/plan should be set for the operation phase by 28 February 2017 according to the ESAP time plan.

Environmental and Social Due Diligence for New Capital Power Plant 11 As the ESMS components are identified and their completion is progressing in parallel with the construction activities, the due diligence team concludes that this matches with the requirements of PS 1.

4.1.4 Organizational capacity and competency

The ESIA identifies the persons responsible for the implementation and supervision of each item in the management program. The ESIA also presented the organizational chart of the Environmental Management Staff (EMS) under the Project Management Unit (PMU). The due diligence team concludes that this matches with the requirements of PS 1.

4.1.5 Emergency preparedness and response

Based on the ESIA review, an emergency preparedness and accident response plan for the construction phase should have been prepared by the 4th quarter of 2015, and implemented at the 2nd quarter of 2016.

This plan should have been finalized and found on site for implementation and review when requested. The due diligence team was informed that the plan is available onsite. Additionally, the Occupational Health Management plan for the construction phase was received through EEHC, with the cover page shown in annex (3), and the complete report is available upon request.

Also the ESAP obtained from the site visit (June 2016 update) mentioned that the Emergency Preparedness and Response for the construction phase as closed. However, EEHC assured that operation plan will be finalized before the operation of the power plant. The due diligence team concludes that this matches with the requirements of PS 1.

4.1.6 Monitoring and review

The ESIA presents the monitoring activities as part of the management program for different aspects (Air quality, Noise, Solid Waste) which also included the monitoring indicators and reporting frequency. However, the ambient air quality reports conducted during the construction phase did not include dust measurements.

Recommendation:

Dust as a parameter should be added to the air quality reports issued during the construction activities.

Environmental and Social Due Diligence for New Capital Power Plant 12 4.1.7 Stakeholder engagement

The ESIA included the 2-phase consultation methodology showing the main participating stakeholders and the key issues raised. The due diligence team concludes that this matches with the requirements of PS 1.

4.2 PS 2- Labor and Working Conditions

4.2.1 Working Conditions and Management of Worker Relationship

Based on the actions identified in the ESAP, the Construction Environmental and Social Management Plan includes closed actions regarding the Employment and Human Resources management as well as Working Conditions Management and Monitoring.

The specific plans and reports mentioned to be available included: worker accommodation management plan, Influx Management plan and guidance on the workforce code of conduct. The workers grievance mechanism and the Occupational health and safety management plan are issues that were closed in the ESAP.

The New Capital Social and Environmental Sustainability Policy defines the society to include employees, suppliers, customers, consumer, local communities and other stakeholders. Furthermore, the Occupational Health Management Plan states that no person under the age of 18 years will be employed through the project and specific actions for the protection of the new and expectant mothers.

In addition, the previously mentioned documents and according to the ESAP, an HR policy was prepared, including an accommodation policy, and the final version should be finalized and in place by 28 February 2017. The due diligence team concludes that this matches with the requirements of PS 2.

4.2.2 Occupational health and safety management

Based on the ESIA review, an occupational health and safety plan for the construction phase should have been prepared by the 4th quarter of 2015, and implemented at the 2nd quarter of 2016. The same dates were also applicable to the preparation and implementation of occupational health and safety plan for the operation phase.

The Occupational Health Management Plan for the construction phase was later received through EEHC. As for the operation phase plan, the due diligence team was informed that the occupational health and safety plan for the operation phase will be in place before the operation of the plant. The plan will be prepared in accordance with the IFC requirements.

Additionally, the ESAP reports that an Occupational Health and Safety monitoring report is being regularly prepared and updated by Siemens/Orascom, and that the reports for

Environmental and Social Due Diligence for New Capital Power Plant 13 April, May and June were already reviewed. The cover page of the Occupational Health Management Plan applied by Orascom can be found in annex (3), and the complete report is available upon request.

The due diligence consultant checked a Quantitative Risk Assessment (QRA) conducted for the power plant. The study identified the major hazards associated with all process within the power plant facilities. In addition, an emergency response plan was prepared for the power plant to manage and handle any emergency situations during the operation of the plant. It worth noting that during the site visit, the due diligence team observed that the accident log is zero. The due diligence team concludes that this matches with the requirements of PS 2.

4.2.3 Grievance mechanism

The ESIA refers to the monitoring of the scope and number of grievances received from the stakeholders. However, nothing was mentioned about grievance mechanism for workers.

The ESAP (updated in August 2016) mentioned that a workers grievance mechanism was prepared and in place during July 2016. The due diligence team concludes that this is in compliance with PS 2.

4.2.4 Communication and training

Based on the ESIA, the workers will undergo environmental and social training in several areas like operation of the power plant, occupational health and safety and contingency plans. The due diligence team concludes that this matches with the requirements of PS 2.

4.3 PS 3- Resource Efficiency and Pollution Prevention

4.3.1 Waste disposal

According to the ESIA, the generated solid waste from NCPP will be collected and evacuated by a licensed contractor as well as the hazardous waste that will be handled by a specialised contractor. Final disposal of wastes will be to local landfill sites, as agreed by the relevant Competent Administrative Authority. The ESIA did not mention the exact offsite landfill site that will receive the collected waste during the construction nor the operation of the power plant.

During the site visit, the due diligence team checked and obtained the waste management plan applied by Orascom during the construction phase (Figure 3). The due diligence team also checked the waste disposal receipts shown in annex (3) that indicates that the liquid waste oil are sent to Petro Trade Company while the solid

Environmental and Social Due Diligence for New Capital Power Plant 14 hazardous wastes are sent to El Nassreya Landfill. Petro Trade is a licensed company in Egypt to collect waste oil. In addition, the contractor clarified that the construction waste is segregated onsite, where a waste Management company (Erteqa’a) collects such waste. The waste sorted and the recyclables are sent back to the site for reuse. The due diligence team checked the construction waste management progress reports. These reports included the monthly waste disposal logs that show the type and amount of waste generated during the construction phase. The due diligence team obtained copies of April and May 2016 progress reports as shown in annex (3). Also, the cover page of the Waste Management Plan applied by Orascom can also be found in annex (3), and the complete report is available upon request.

Recommendation:

Specifying the exact landfills that the project will dispose its hazardous and non- hazardous wastes during operation phase and finalizing the contractual agreements with the identified landfills.

4.3.2 Air emissions

According to the ESIA, ambient air measurements were conducted at four points at the boundary of the project site to monitor and record the air quality at the project area. These measurements show the concentration of the gaseous and suspended particulates (TSP, PM10 and PM2.5) pollutants in the project area before implementing the project.

An air dispersion model was conducted to predict the air quality at the project area during the operation of the power plant. This air model was performed for nitrogen dioxide NO2 as carbon monoxide (CO), sulphur dioxide (SO2), and particulate matter less than 10 microns (PM10) were considered negligible. The air model results for NO2 predicted that the overall ambient NO2 concentrations will be within the Egyptian limits and the World Bank limits. Since it is not expected that CO will have a major impact due to complete combustion of natural gas, this issue is considered to be minor and there is no need for follow up action on it.

During the site visit, the due diligence team checked the air quality reports done by Orascom inside the power plant site during the construction activities. The due diligence team obtained January 2016 air quality report as a sample that included results at different locations inside the site indicating the concentrations of CO, NO2 and SO2 in addition to the noise and heat levels. However, no dust measurements were conducted. The report can be found in annex (3) and it shows that the gaseous emissions at different locations in the site are complying with the national law.

Recommendation:

Environmental and Social Due Diligence for New Capital Power Plant 15 The company should add dust as a parameter to the air quality reports during the construction activities.

4.3.3 Noise emissions

The due diligence team checked the noise reports done by Orascom to record the noise levels at different locations in the site during the construction phase. As shown in annex (3), January 2016 report obtained by the due diligence team shows that the noise levels at most of the locations in the site are complying with the national laws except for certain locations where the workers must use ear plugs. The due diligence team concludes that this matches with the requirements of PS 3.

4.3.4 Water supply

Based on the ESIA, the water supply to NCPP is planned to be through Cairo water network / 10th of Ramadan water network. The due diligence team obtained a copy from the minutes of meeting between EEHC and the Ministry of Housing specifying the starting date of construction of the pipeline in addition to the approval of the design firm on the submitted drawings for such pipeline, attached in Annex (1).

Currently, it is foreseen that the pipeline construction is delayed and efforts are made to speed up the construction process, however until the construction of the pipeline is complete, the water used for construction is obtained via trucks and stored in tanks onsite, while drinking water is purchased in the form of bulk Mineral Water Bottles. The due diligence team concludes that this matches with the requirements of PS 3.

4.3.5 Wastewater discharge

The ESIA stated that the sewage wastewater during the operation of the power plant will be disposed to the sewer network system of Cairo New Capital after being treated in the on-site treatment facility. During the construction phase, the wastewater is collected in septic tanks, and is then transferred through licenced contractors to a nearby wastewater treatment plant in New Cairo.

During the site visit, the due diligence team obtained the water and wastewater management plan applied by Orascom (its cover page is shown in annex (3), and the complete report is available upon request). The plan briefs the responsibilities and the monitoring program that should be applied by NCPP for the management of the water resources and wastewater treatment and disposal during the construction phase. While during the operation phase, it was mentioned that a wastewater treatment plant is designed as part of the plant to produce effluent suitable for discharge to the sewage network. The construction of the wastewater treatment plant has started about 2 months ago (around August 2016).

Environmental and Social Due Diligence for New Capital Power Plant 16 It was mentioned by EEHA that the coordination with the Ministry of Housing for the water supply pipelines will later include the wastewater discharge too as they are under the same management and usually constructed as one package. However due to the current schedule delay in the construction of the pipeline, the agreement has not been finalized yet. The due diligence team concludes that this matches with the requirements of PS 3.

4.3.6 Hazardous waste management

Although a natural gas power plant does not produce significant amounts of waste, the ESIA mentioned the procedures for storing and transporting the hazardous waste. The due diligence team also checked the waste disposal receipts (shown in annex 3). The liquid waste oil are sent to Petro Trade Company while the solid hazardous wastes are sent to El Nassreya Landfill. Petro Trade is a licensed company in Egypt to collect waste oil.

Recommendation

Specifying the exact landfills that the project will dispose its hazardous wastes during operation phase and finalizing the contractual agreements with the identified landfills.

4.3.7 Energy conservation

The power plant will produce 4800 MWe through 8 gas turbines (each of 400 MWe) and 4 steam turbines (each of 400 MWe). The steam turbines will provide 1/3 of the total capacity of the power plant. The choice of implementation of a combined cycle technology ensures having high overall process efficiency, which accordingly will help in reducing the dependency on the natural gas is in accordance with PS 3.

4.3.8 Water conservation

As mentioned above, the choice of an air-cooled condenser system for the cooling processes in the power plant will help in preserving large amount of water compared to water cooled systems. In addition, the treated wastewater will be reused in the plantation irrigation system. The due diligence team concludes that this matches with the requirements of PS 3.

4.3.9 Contaminated land

Based on the ESIA, in order to avoid any ground contamination, several measures are applied during the construction phase including provision of site drainage systems, and removal of unsuitable waste materials on site. While for the operation phase, specific measures should be implemented like installation of bunds to isolate areas of potential oil spillages in addition to covering all the oil and chemical tanks with secondary

Environmental and Social Due Diligence for New Capital Power Plant 17 containment structures that will hold 110% of the contents of the largest storage tank. The due diligence team concludes that this matches with the requirements of PS 3.

4.4 PS 4- Community Health and Safety

4.4.1 Spill control and management

Based on the ESIA review, an oil spill contingency plan should be prepared and implemented by the 1st quarter of 2016 to be applied during the operation of the power plant for monitoring and handling of the light fuel oil delivered to the site. It is worth mentioning that the light fuel oil is expected to be used less than 170 hours per year, and that all the tanks are placed in areas with controlled drainage facilities.

The due diligence team was assured by the contractor that the plan is available and that a number of spill contingency measures during operation are included in the design e.g. the availability of oil filters in the turbines and oil collection system in transformers in the case of spillage. The due diligence team concludes that this matches with the requirements of PS 4.

4.4.2 Structural safety of project infrastructure

Based on the ESIA, since the Cairo New Capital area is vulnerable to earthquakes, the power plant should be designed and constructed to conform to Uniform Building Code Zone seismic criteria for earthquake. The power plant has also been designed to comply with the international code of the National Fire Protection Authority (NFPA), which requires particular specifications for fire protection. The due diligence team concludes that this matches with the requirements of PS 4.

4.4.3 Traffic safety

During the site visit, the due diligence consultant checked a traffic management plan done by Orascom to manage and control the vehicle movements entering and leaving the site. This plan includes the responsibilities and procedures to operate vehicles in the site to reduce the risks. During the operation of the power plant, the natural gas will be supplied through pipelines, so no significant traffic volumes will take place. The cover page of the traffic management plan applied by Orascom can be found in annex (3), and the complete report is available upon request. The due diligence team concludes that this matches with the requirements of PS 4.

Environmental and Social Due Diligence for New Capital Power Plant 18 4.5 PS 5- Land Acquisition and Involuntary Resettlement

4.5.1 Land acquisition

The power plant is located on an area of about 744,811 m2 in a highly arid desert land with no residential properties. This land was allocated to CEPC by the Cabinet of Ministers according to decree 60/09/15/19 issued during the meeting on 10/9/2015, after the approval of the Ministry of defense.

The allocated land is included within the 2 km distance around Cairo /Sokhna road, which was built by the Ministry of Defence, and is considered as Military land and accordingly handed over from the Ministry of Defence to EEHC. Accordingly, a land handover meeting was held, and the meeting minutes are shown in annex (4). During this meeting, it was agreed between the EEHC representative and the representatives from the Ministry of defence that the land should be handed over immediately for the works to start, and that the concerned stakeholders should be immediately informed about that.

The electric generated power will be transmitted through existing network transmission lines. In addition, there are no human activities that will be negatively affected by the power plant construction and operation.

Therefore, no social issues or claims were recorded as the development of the power plant did not include any land acquisition and did not affect any local community. The due diligence team concludes that this matches with the requirements of PS 5.

4.6 PS 6- Biodiversity Conservation and Sustainable Management of Living Natural Resources

NCPP is located at a selected site at the north of the Cairo / Ain Sokhna Freeway at a distance of around 50 Km from Cairo and 60 Km from Ain Sokhna. Since the power plant is located in a highly arid desert land, no living natural resources are affected by the implementation of the power plant. Only species that can tolerate the desert conditions are found in the project area. The ESIA also presented some mitigation measures to minimize disturbance to the flora and fauna species nearby the site. The due diligence team concludes that this matches with the requirements of PS 6.

4.7 PS 7- Indigenous People

No indigenous people are found in the project area, so this performance standard does not apply.

Environmental and Social Due Diligence for New Capital Power Plant 19 4.8 PS 8- Cultural Heritage

As indicated by the ESIA, the power plant’s location does not include any archaeological remains. Therefore, this performance standard does not apply.

4.9 WBG EHS Sector Guidelines for Thermal Power Plants

The power plant’s status was checked and compared to the WB guidelines for thermal power plants. All the guidelines were covered and checked through the review with the performance standards.

4.9.1 Mitigation of air emissions

The following table shows a comparison between the air emissions limits in the guidelines and the design parameters for the turbines. The table shows that the design values comply with the World Bank limits.

Table 3 Comparison of air emissions between turbine design and WB limits

Parameter Turbine design World Bank limits (mg/Nm3) Value, mg/m3 Natural Gas Fuel Oil NOx 45 51 152 SO2 0 N/A Use of 1% or less S fuel (NDA)

Use of 0.5% or less S fuel (DA) TSP&PM10 <5 N/A 50 (NDA) 30 (DA) CO 100 Not Specified

Regarding the mitigation of the air emissions from the power plant, specific measures will be applied during the operation of the power plant. Low NOx combustors will be used in addition to that the stack height is 60 m to allow good dispersion to the surroundings.

4.9.2 Energy efficiency and GHG emissions

CO2 is considered the main GHG emitted during the construction activities of the power plant and from fuel combustion during the operation phase. The choice of implementing

Environmental and Social Due Diligence for New Capital Power Plant 20 combined cycle power plant in addition to utilizing natural gas as the primary fuel will help in minimizing the CO2 emissions from the power plant.

Based on the ESIA, the generating efficiency of the power plant is set to be 55-58% with associated CO2 emissions of 390 g/KWh. As per WBG EHS Sector Guidelines for Thermal Power Plants, the typical CO2 emissions performance for a combined cycle power plant firing natural gas is 51% with CO2 emissions of 396 g/KWh.

According to the ESAP, a report on GHG emissions and plant efficiency was prepared to calculate GHG emissions in tonnes CO2e per year and grams CO2e/kWh. This report will be prepared annually to check the plant efficiency.

4.9.3 Thermal discharges

The power plant will operate on an air-cooled condenser system. Also, the wastewater treatment plant onsite will produce an effluent suitable for discharge into the sewer system. These actions will prevent the presence of any thermal discharges to the surroundings.

4.9.4 Solid wastes

Covered in section 4.3.1

4.9.5 Hazardous materials and oils

In order to prevent any hazard associated with hazardous waste handling, as mentioned above, there is a waste management plan applied by Orascom during the construction phase. This plan includes the procedure of storing and transporting any hazardous or non-hazardous waste. Regarding the waste storage, the plan ensures that all the waste will be stored in containers at designated facilities which are designed with an impervious concrete pad and bunding which provides for 110% capacity of the total volume of the largest container. Also, all the containers should be labelled according to its content and appropriately sealed. Concerning the waste transportation, approved contractors only are allowed to transport the waste by appropriate vehicles by trained operators.

4.9.6 Noise

For the construction phase, as mentioned in section 4.3.3, the noise records reviewed by the due diligence team showed that the noise levels at different locations are complying with the national laws except for certain locations where the workers must use ear plugs.

Environmental and Social Due Diligence for New Capital Power Plant 21 According to the ESIA, specific design measures were applied to mitigate the noise emissions during the operation of the power plant. These measures include enclosing the main equipment in buildings and equipping the compressors with air silencers.

4.9.7 Occupational health and safety

Covered in section 4.2.1

4.9.8 Monitoring emissions

Based on the ESIA, regarding the emissions monitoring during the operation of the power plant, there will be automatic continuous monitoring of the stacks emissions for NOx, SO2, particulate matter and CO in the stacks. Concerning the ambient air quality monitoring, 2 continuous monitoring stations will be installed to record NOx, SO2, particulate matter and CO as well as the meteorological data. These stations will be electronically connected to the EEAA ambient monitoring system.

All these actions are complying and consistent with the requirements of WBG EHS Sector Guidelines for Thermal Power Plants.

4.10 WBG EHS General Guidelines

4.10.1 Environmental

(i) Air emissions and ambient air quality Covered in section 4.1.3

(ii) Energy conservation Covered in sections 4.3.74.3.7 and 4.9.2

(iii) Wastewater and ambient water quality Covered in section 4.3.5

(iv) Water conservation Covered in section 4.3.8

(v) Hazardous materials management Covered in section 4.3.6 and 4.9.5

(vi) Waste management Covered in section 4.3.1 and 4.9.4

(vii) Noise Covered in section 4.3.3 and 4.9.6

(viii) Contaminated land Covered in section 4.3.9

Environmental and Social Due Diligence for New Capital Power Plant 22 4.10.2 Occupational health and safety

(i) General facility design and operation Covered in section 4.2.1, 4.4.1, and 4.4.2

(ii) Communication and training Covered in 4.2.4

(iii) Hazards Covered in sections 4.2.1 and 4.4.1

(iv) Personal protective equipment Covered in section 4.2.1

(v) Special hazard environments Covered in section 4.2.1

(vi) Monitoring

Covered in section 4.1.6 4.10.3 Community health and safety

(i) Water quality and availability Covered in section 4.3.4

(ii) Structural safety of project infrastructure Covered in section 4.4.2

(iii) Life and fire safety (L&FS) Covered in sections 4.2.1 and 4.4.2

(iv) Traffic safety Covered in section 4.4.3

(v) Transport of hazardous materials Covered in sections 4.3.6 and 4.9.5

(vi) Disease prevention No issues anticipated

(vii) Emergency preparedness and response Covered in section 4.2.1

4.10.4 Construction and decommissioning

(i) Environment This was covered in the abovementioned guidelines. The due diligence team concludes that this matches with the WBG EHS guidelines.

Environmental and Social Due Diligence for New Capital Power Plant 23 (ii) Occupational health and safety This was covered in the abovementioned guidelines. The due diligence team concludes that this matches with the WBG EHS guidelines.

(iii) Community health and safety

This was covered in the abovementioned guidelines. The due diligence team concludes that this matches with the WBG EHS guidelines.

4.11 Summary of the Environmental and Social Findings

The due diligence team concluded that NCPP is considered to be in compliance with the World Bank/IFC Performance Standards. However, minor issues are identified, which do not pose any risks to the construction and operation of the project. The following table summarizes the main comments and recommendations.

Table 4 Summary of the Environmental and Social findings

Item Aspect Issue PS 3- Resource Efficiency and Pollution Prevention 1. Waste Disposal The waste disposal facility that will be used during operation of the power plant is not specified by the ESIA nor currently known by the project owner. 2. Air Emissions The due diligence team obtained January air quality report as a sample that included results at different locations inside the site indicating the concentrations of CO, NO2 and SO2 in addition to the noise and heat levels. However, no dust measurements were conducted 3. Hazardous waste management The hazardous waste disposal facility that will be used during operation of the power plant is not specified by the ESIA nor currently known by the project owner.

Environmental and Social Due Diligence for New Capital Power Plant 24 5. POWER PLANT COMPLIANCE WITH NATIONAL REGULATIONS

The review of the power plant’s documents and the site visit conducted to the plant’s site showed that the power plant is complying with the national laws and regulations. An ESIA for the power plant was prepared in accordance with the national regulations and requirements and submitted for EEAA for approval. The approval of EEAA was issued on 10/12/2015, and in presented in Annex (1) of this report.

Based on the documents’ review and the site visit, the power plant’s design and construction activities comply with the limits specified in the executive regulations of the environmental law for the different environmental aspects. This includes ambient air quality, air emissions from the power plants stacks during operation, management of hazardous and non-hazardous solid wastes, ambient noise levels, air and noise quality in the work environment, and wastewater discharge regulations.

Regarding land acquisition of the power plant’s site, as mentioned above, this land was allocated to CEPC by the Cabinet of Ministers according to decree 60/09/15/19 issued during the meeting on 10/9/2015, after the approval of the Armed forces. Therefore, the development of the power plant did not include any land acquisition and did not affect any local community.

The national regulations also include issuing the key permits required for the construction and operation of the power plant. The due diligence team has received the environmental permit shown in annex (1) for review. In addition, the due diligence team has received the land handover meeting minutes between the Ministry of Defence and EEHC which is considered as an approval of Ministry of Defence on the project, and at a later stage the Land allocation Letter from the Cabinet of Ministers was received from EEHC (Annex 4). In addition, the EIA study for the power plant’s OHTL was already submitted by the Egyptian Electricity Transmission Company (EETC) and the EEAA approval was acquired.

As part of assessing the project compliance with local laws and regulations, the due diligence team checked the EEAA approval conditions and evaluated the compliance status as shown in the following table.

Table 5 EEAA approval compliance status

Item Condition Compliance status 1 Committing to the use of Natural Gas as Complying: the main fuel for the boilers used in the According to design considerations, plant, and using Light Fuel Oil (solar) as a the combustion turbines will secondary fuel in case of emergency only operate mainly using natural gas and within the limit of 2% of the annual except in case of emergency

Environmental and Social Due Diligence for New Capital Power Plant 25 operating hours 2 Periodical and continual update of the Complying: Quantitative and Qualitative Risk According to the ESAP, the QRA has assessment study been updated once to include more mitigation measures 3 Committing to obtaining the approval of In progress: the Ministry Water Resources and Negotiation process has started to Irrigation obtain the approval 4 Committing to the instruction towards the Complying: submission of a scoped EIA study for the EEAA approval is obtained Electricity Transmission Lines linked to the Power Plant

5 Committing to the installation of Complying: Continuous Emissions Monitoring System Taken into consideration in the (CEMS) for the stacks emissions, and design and will be implemented linking them to the National Monitoring during the operation phase Network 6 Committing that the cumulative pollution Complying: load of the ambient air pollutants in the According to the mitigation area does not exceed the limits set by the measures mentioned in the design executive regulations amended by decree (discussed in section 4.9.1), the 1095/2011 power plant is complying with this condition 7 Abiding by the maximum permissible Complying: ambient air pollutants levels in accordance According to the mitigation with annexes 5 and 6 of the executive measures mentioned in the design regulations amended by Decree (discussed in section 4.9.1), the 1095/2011 power plant is complying with this condition 8 Committing to the maximum permissible Complying: noise levels in accordance with annex 7 of As discussed in section 4.9.6, the decree 1095/2011 and its amendment measurements are being conducted by decree 964/2015 during the construction and mitigation measures are included in the design considerations for the operation phase 9 Commitment to not exceed the maximum Complying: permissible pollutant levels inside the According to the mitigation work environment, while limiting the measures mentioned in the design emitted Nitrogen Oxides (NOx) emissions (discussed in section 4.9.1), the through the use of low NOx emitting power plant is complying with this combustibles as mentioned in the study condition 10 Environmentally safe and proper disposal In progress: of the solid waste resulting from the Implemented during the construction and operation over regular construction phase and disposal

Environmental and Social Due Diligence for New Capital Power Plant 26 intervals receipts and log were checked as shown in annex (3). Specific landfills are not yet specified for the operation phase. 11 Environmentally safe and proper disposal In progress: of the hazardous wastes resulting from Implemented during the the activities through an approved entity construction phase and disposal receipts were checked as shown in annex (3). Specific landfills are not yet specified for the operation phase. 12 Environmentally sound and safe disposal Complying: of the used hazardous materials and Should be implemented during the keeping the Material Safety Data Sheets operation phase (MSDS) for all the chemicals used 13 Committing to the installation of the Complying: required stack in accordance to article 42 Taken into consideration in the of the executive regulations amended by design and construction is already in decree 1095/2011 and decree 964/2015 progress

14 Commitment to the use of air cooled Complying: condenser system to the suggested Taken into consideration in the expansions as mentioned in the study design and construction is already in progress 15 Commitment to the treatment of the Complying: resulting sewage from the operation of Taken into consideration in the the plant in the designated treatment design and construction is already in plant and that the treated wastewater progress from the treatment plant is in accordance with law 93/1962 and Decree 44/2000 and other ministerial degrees regulating the wastewater discharge to the sewage network. 16 Abiding to the maximum permissible limit Complying: for exposure to electromagnetic waves Taken into consideration in the design 17 Abiding by the Environmental and Social Complying: Monitoring Plan and registering the results The construction ESMP has been of the measurements and analysis in the updated and the operation ESMP environmental register will be updated before commissioning phase regularly updated 18 Commitment from the company to Complying: achieve societal consensus and increasing Although the power plant is not the social participation during the surrounded by residential areas, the construction and operation periods power plant has a stakeholders engagement plan, and a workers

Environmental and Social Due Diligence for New Capital Power Plant 27 grievance mechanism is in place. 19 Preparing an Environmental Register to Complying: include all the results of the periodical A complete environmental register monitoring from the combustion unit and should be prepared during the the hazardous waste disposal register operation phase and for the construction phase, environmental records are being maintained and regularly updated

Environmental and Social Due Diligence for New Capital Power Plant 28 6. CONCLUSIONS AND RECOMMENDATIONS

Based on the review of the available data, the meetings and discussions conducted with the EEHC representatives, and the site visit conducted to the power plant site, the due diligence team concluded that NCPP is considered to be in compliance with the World Bank/IFC Performance Standards. None of the comments mentioned in the previous sections may pose any environmental or social threats on the successful construction and operation of the power plant. However, the following recommendations need to be considered and implemented within the proposed time frame as shown in the following table:

Table 6 Recommended Corrective Action Plan

Item Aspect Required action Time frame Verification method 1. Air Emissions Adding dust as a parameter to the By the end Receiving air quality reports during the of the 1st air construction activities. quarter of emissions 2017 report 2. Waste Specifying the exact landfills that By the end Receiving disposal the project will utilize to dispose its of the 1st the waste wastes during operation phase and quarter disposal finalizing the contractual after receipts agreements with such landfills. operation

3. Hazardous Specifying the exact landfills that By the end Receiving waste the project will utilize to dispose its of the 1st the management hazardous wastes during operation quarter hazardous phase and finalizing the contractual after waste agreements with such landfills. operation disposal receipts

Environmental and Social Due Diligence for New Capital Power Plant 29 ANNEX (1) APPROVALS FOR NCPP

Figure A- 1 EEAA approval for construction and operation of NCPP (1)

Environmental and Social Due Diligence for New Capital Power Plant 30 Figure A- 2 EEAA approval for construction and operation of NCPP (2)

Environmental and Social Due Diligence for New Capital Power Plant 31 Arab Republic of Egypt Egyptian Cabinet Ministry of State for Environmental Affairs Registration Number: 6147 Egyptian Environmental Affairs Agency Date: 10/12/2015

Mr. Engineer/ Gaber Desouki Mostafa Chairman of the Egyptian Electricity Holding Company After Greetings,

With reference to the letter received from the Member of the Board of Directors dated 30/11/2015 to which was attached the Environmental study regarding the project named “Construction of the Cairo New Capital Power Plant Project” which will operate in combined cycle mode with a total capacity of 4800 MW (2 x 400 MW Combustion Gas Turbine Generators, 1 x 400 MW Steam Turbine Generator), on an area of 744,811 m2 inside the currently allocated project site, through/ Egyptian Electricity Holding Company at the Address/ 45 km East of Cairo outside the greater Cairo boarder and 50 km West of Suez.

We would like to inform you that after revising and evaluating the delivered environmental impact assessment study, the EEAA approves the submitted project, with the condition of abiding by all the specifications and procedures mentioned in the Environmental Impact/ Assessment (EIA) study submitted to the EEAA, and to all the rules, conditions, and standards stated in law no. 4 /1994 amended by law no. 9 /2009 and the executive regulations amended by decree 1095/2011, decree 710/2012 and decree 964/2015 with law 105/2015 while committing to the following conditions:

1. Committing to the use of Natural Gas as the main fuel for the boilers used in the plant, and using Light Fuel Oil (solar) as a secondary fuel in case of emergency only and within the limit of 2% of the annual operating hours (with a maximum of 170 hours) as mentioned in the EIA study.

2. Periodical and continual update of the Quantitative and Qualitative Risk assessment study, and delivering continuous training to the specialized workers.

3. Committing to obtaining the approval of the Ministry Water Resources and Irrigation (MWRI) in case that the project is located in the path of any valleys or storm water drains before the commencement of any protection activities and submitting a scoped EIA for the proposed protection measures.

4. Committing to the instruction towards the submission of a scoped EIA study for the Electricity Transmission Lines linked to the Power Plant.

5. Committing to the installation of Continuous Emissions Monitoring System (CEMS) for the stacks emissions, and linking them to the National Monitoring Network at the EEAA at the cost of the company in accordance with the technical specifications set by the EEAA.

Environmental and Social Due Diligence for New Capital Power Plant 32 Arab Republic of Egypt Egyptian Cabinet Ministry of State for Environmental Affairs Registration Number: 6147 Egyptian Environmental Affairs Agency Date: 10/12/2015

6. Committing that the cumulative pollution load of the ambient air pollutants in the area does not exceed the limits set by the executive regulations amended by decree 1095/2011 and with accordance with the measurements include in the study.

7. Abiding by the maximum permissible ambient air pollutants levels in accordance with annexes 5 and 6 of the executive regulations amended by Decree 1095/2011 with limiting the amount of gaseous pollutants.

8. Committing to the maximum permissible noise levels in accordance with annex 7 of the decree 1095/2011 and its amendment by decree 964/2015, and taking the necessary precautions to that end as mentioned in the EIA study.

9. Commitment to not exceed the maximum permissible pollutant levels inside the work environment in accordance with annex 8 of the executive regulations amended by decree 1095/2011, while limiting the emitted Nitrogen Oxides (NOx) emissions through the use of low NOx emitting combustibles as mentioned in the study.

10. Environmentally safe and proper disposal of the solid waste resulting from the construction and operation over regular intervals.

11. Environmentally safe and proper disposal of the hazardous wastes resulting from the activities (Filters, used oil and grease resulting from the operation and maintenance activities) through an approved entity in accordance with the laws and regulations as mentioned in the study and in compliance with article 28 of the executive regulations amended by decree 1095/2011 and decree 964/2015.

12. Environmentally sound and safe disposal of the used hazardous materials in accordance to article 31 of the executive regulations amended by decree 1095/2011 and keeping the Material Safety Data Sheets (MSDS) for all the chemicals used.

13. Committing to the installation of the required stack in accordance to article 42 of the executive regulations amended by decree 1095/2011 and decree 964/2015.

14. Commitment to the use of air cooled condenser system to the suggested expansions as mentioned in the study.

15. Commitment to the treatment of the resulting sewage from the operation of the plant in the designated treatment plant as mentioned in the study, while committing that the treated wastewater from the treatment plant is in

Environmental and Social Due Diligence for New Capital Power Plant 33 Arab Republic of Egypt Egyptian Cabinet Ministry of State for Environmental Affairs Registration Number: 6147 Egyptian Environmental Affairs Agency Date: 10/12/2015

accordance with law 93/1962 and Decree 44/2000 and other ministerial degrees regulating the wastewater discharge to the sewage network.

16. Abiding to the maximum permissible limit for exposure to electromagnetic waves in accordance with the regulations of the International Commission On Non- ionizing Radiation Protection (ICNIRP).

17. Abiding by the Environmental and Social Monitoring Plan and registering the results of the measurements and analysis in the environmental register, which should be available in case of environmental auditing.

18. Commitment from the company to achieve societal consensus and increasing the social participation during the construction and operation periods.

19. Preparing an Environmental Register to include all the results of the periodical monitoring from the combustion unit and the hazardous waste disposal register in accordance with article 33 of annex 3 and table 2 of the executive regulations amended by decree 1095/2011, and ensuring the availability of the register during environmental audits.

This approval is from the environmental perspective only without breaching any other laws, rules or regulations related to this activity, and in case of non-compliance with any of the requirements mentioned above, this approval will be considered invalid, and the company will bear its responsibility towards any environmental damages.

Chief Executive Officer

(Eng. Ahmed Abou El-Seoud)

Environmental and Social Due Diligence for New Capital Power Plant 34 Figure A- 3 Coordination meeting minutes for the water pipeline connection for NCPP (1)

Environmental and Social Due Diligence for New Capital Power Plant 35 Figure A- 4 Coordination meeting minutes for the water pipeline connection for NCPP (2)

Environmental and Social Due Diligence for New Capital Power Plant 36 Figure A- 5 Coordination meeting minutes for the water pipeline connection for NCPP (3)

Environmental and Social Due Diligence for New Capital Power Plant 37 Figure A- 6 Coordination meeting minutes for the water pipeline connection for NCPP (4)

Environmental and Social Due Diligence for New Capital Power Plant 38 Figure A- 7 Coordination meeting minutes for the water pipeline connection for NCPP (5)

Environmental and Social Due Diligence for New Capital Power Plant 39 Figure A- 8 Coordination meeting minutes for the water pipeline connection for NCPP (6)

Environmental and Social Due Diligence for New Capital Power Plant 40 ANNEX (2) SOIL AND GROUNDWATER ANALYSIS

Environmental and Social Due Diligence for New Capital Power Plant 41 ANNEX (3) ENVIRONMENTAL PRACTICE DOCUMENTS

Figure A- 9 Liquid waste receipt-1

Environmental and Social Due Diligence for New Capital Power Plant 42 Figure A- 10 Liquid waste receipt-2

Environmental and Social Due Diligence for New Capital Power Plant 43 Figure A- 11 Hazardous solid waste receipt-1

Environmental and Social Due Diligence for New Capital Power Plant 44 Figure A- 12 Hazardous solid waste receipt-2

Environmental and Social Due Diligence for New Capital Power Plant 45 Environmental and Social Due Diligence for New Capital Power Plant 46 Figure A- 13 May construction waste management progress report-1

Environmental and Social Due Diligence for New Capital Power Plant 47 Figure A- 14 May construction waste management progress report-2

Environmental and Social Due Diligence for New Capital Power Plant 48 Figure A- 15 May construction waste management progress report-3

Environmental and Social Due Diligence for New Capital Power Plant 49 Figure A- 16 May construction waste management progress report-4

Environmental and Social Due Diligence for New Capital Power Plant 50 Figure A- 17 January Air Quality and Noise levels Report-1

Environmental and Social Due Diligence for New Capital Power Plant 51 Figure A- 18 January Air Quality and Noise levels Report-2

Environmental and Social Due Diligence for New Capital Power Plant 52 Figure A- 19 January Air Quality and Noise levels Report-3

Environmental and Social Due Diligence for New Capital Power Plant 53 Figure A- 20 January Air Quality and Noise levels Report-4

Environmental and Social Due Diligence for New Capital Power Plant 54 Figure A- 21 January Air Quality and Noise levels Report-5

Environmental and Social Due Diligence for New Capital Power Plant 55 Figure A- 22 Cover page of the Occupational Health Management Plan applied by Orascom

Environmental and Social Due Diligence for New Capital Power Plant 56 Figure A- 23 Cover page of the Waste Management Plan applied by Orascom

Environmental and Social Due Diligence for New Capital Power Plant 57 Figure A- 24 Cover page of the Water and Wastewater Management Plan applied by Orascom

Environmental and Social Due Diligence for New Capital Power Plant 58 Figure A- 25 Cover page of the traffic management plan applied by Orascom

Environmental and Social Due Diligence for New Capital Power Plant 59 ANNEX (4) LAND ALLOCATION LETTER AND HANDOVER MEETING MINUTES

Figure A- 26 Land Allocation Letter from the Cabinet of Ministers - 1

Environmental and Social Due Diligence for New Capital Power Plant 60 Figure A- 27 Land Allocation Letter from the Cabinet of Ministers - 2

Environmental and Social Due Diligence for New Capital Power Plant 61 Figure A- 28 Land handover meeting minutes-1

Environmental and Social Due Diligence for New Capital Power Plant 62 Figure A- 29 Land handover meeting minutes -2

Environmental and Social Due Diligence for New Capital Power Plant 63 Figure A- 30 Land handover meeting minutes -3

Environmental and Social Due Diligence for New Capital Power Plant 64 Figure A- 31 Land handover meeting minutes -4

Environmental and Social Due Diligence for New Capital Power Plant 65 Figure A- 32 Land handover meeting minutes -5

Environmental and Social Due Diligence for New Capital Power Plant 66 ANNEX (5) MEETINGS AND SITE VISIT MOM

Meetings Proceedings Details:

Table A- 1 First Meeting at EEHC

Entity EEHC Eng. Hekmat General Director of the Environmental studies Abdulrahman Selim Department, Ministry of Electricity and Energy Dr. Ismail El Sawy Senior Research Engineer at the Environmental Project Management Sector, EEHC Attendees Dr. Mohamed Fathy Environmental Assessment Department Tash Manager, Egyptian Natural Gas Co. (GASCO) Dr. Amr Abd El Aziz President, Integral Consult Dr. Ahmad Wafiq Technical Team Lead, Integral Consult Date 9/5/2016 Purpose Gathering the available data and documents related to the 7 power plants fed by the natural gas pipelines financed by the World Bank (including NCPP) Summary  EEHC clarified that all the power plants including NCPP have already obtained the environmental approval from the Egyptian Environmental Affairs Agency (EEAA)  The social status of the power plants regarding the land acquisition aspect was discussed. EEHC clarified that out of the three new power plants (NCPP, El Burullus and Beni Suef) a livelihood restoration action plan is only required for Beni Suef, while no similar study is required for NCPP.  EEHC will send to the due diligence consultant the EEAA approvals, lender approvals, land ownership documents, and Beni Suef livelihood restoration action plan once finalized.  EEHC will also send to the due diligence consultant the contact details of the focal points inside the electricity production companies to get more specific data about each power plant.

Table A- 2 Second Meeting at EEHC

Entity EEHC Dr. Ismail El Sawy Senior Research Engineer at the Environmental Project Management Sector, EEHC Dr. Maher Aziz Consultant contributed in preparing the ESIA Attendees for the power plant Graham Macdonald Planner/ Social Scientist Dr. Amr Abd El Aziz President, Integral Consult Eng. Esraa El Mitainy Senior Environmental Specialist, Integral

Environmental and Social Due Diligence for New Capital Power Plant 67 Consult Date 24/5/2016 Purpose Gathering the available data and documents related to Cairo New Capital, El Burullus and Beni Suef Power Plants Summary  The meeting included discussion on the ESIAs prepared for the three power plants.  The required permits for constructing and operating the power plants were requested to be checked and reviewed as they were not included in the ESIA. Dr. Ismail ensured that the permits are secured and will be sent to the due diligence consultant for review.  The social status of the power plants regarding the land acquisition aspect was discussed. The meeting concluded that the construction of Cairo New Capital power plant did not need any action of land acquisition. On the other hand, Beni suef power plant included land acquisition and livelihood restoration plans are being prepared and planned to be submitted to the lenders by the 1st of June, 2016. As for El Burullus power plant, no action was primarily taken, but at a recent stage of implementation, new land was acquired by the contractor, and a consultant was hired to investigate the status of the acquired land.  The due diligence consultant requested conducting site visits to the three power plants. They were asked to send their IDs for the permissions.

Table A- 3 Third Meeting at EEHC

Entity EEHC Dr. Ismaail El Sawy Senior Research Engineer at the Environmental Project Management Sector, EEHC Eng. Ehab Shaalan Senior Environmental Specialist, Environment and Natural Resources, World Bank Mrs. Amal Faltas Senior Social Specialist, World Bank Dr. Magda Amin Director General of Environmental Protection Department, Egyptian Natural Gas Co. (GASCO) Dr. Azza El-Trabili Executive General Manager of the Attendees Environmental Protection Department, GASCO Dr. Mohamed Fathy Environmental Assessment Department Tash Manager, GASCO Eng. Ahmed Galal Environmental Assessment Department Assistant Manager, GASCO Dr. Amr Abd El Aziz President, Integral Consult Eng. Esraa El Mitainy Senior Environmental Specialist, Integral Consult Date 29/9/2016 Purpose Discussing the status of the documents requested from EEHC and not received until the submission of the second draft report Summary

Environmental and Social Due Diligence for New Capital Power Plant 68  The meeting started with a discussion about the importance of the due diligence reports as part of the Natural Gas Funding preparation process and accordingly the importance of obtaining all the required information for the plants’ environmental and social practices.  EEHC ensured their commitment to supply the required information in order to support the preparation of the reports  The due diligence consultant explained the list of the required information, with special focus on the Livelihood Restoration Plan, and changes in ESIA for Beni Suef Power plant, Land Acquisition and Compensation Framework for Burullus as well as the missing land allocation permits and practice proof for other power plants.  EEHC representative committed to do his best to supply the information he can collect within a week after the meeting.

Site Visit Proceedings Details:

Table A- 4 Site Visit to New Capital Power Plant Site

Entity New Capital Power Plant Eng. Mohamed El Project Director from Orascom, New Capital Dessouky Power Plant Eng. Saber Diab Lead manager from Orascom, New Capital Power Plant Mr. Ihab Shalaan Environmental Consultant, World Bank Attendees World Bank Delegation Dr. Mohamed Fathy Environmental Assessment Department Tash Manager, Egyptian Natural Gas Co. (GASCO) Dr. Amr Osama President, Integral Consult Eng. Esraa El Mitainy Senior Environmental Specialist, Integral Consult Date 16/6/2016 Purpose Site visit and gathering the available data and documents related to New Capital Power Plant Summary  A brief description about the current plant progress was presented.  The land Acquisition was mentioned to be mainly from the Army as there is 10 km to each side of the Sokhna road belongs to the Army, who built and operates this road.  Water supply will be from the municipality by pipeline from the 10th of Ramadan, and it is currently under construction. In the meantime, the water used in the construction phase is mainly obtained via water tankers and stored in tanks onsite, while the drinking water is purchased in the form of Bulk Mineral Water Bottles. There is an agreement already in place between the EEHC and the

Environmental and Social Due Diligence for New Capital Power Plant 69 Ministry of Housing to supply 5,000 m3/day water.  Construction started on the 11th of July 2015. The first CTG unit should be connected to the grid by December 2016, second CTG unit by the end of March 2017, third CTG unit by the end of November 2017, while the 4th CTG and all the STGs are planned to be operational by May 2018 (project full operation).  The ground water research institute was contacted to study the status of the ground water in the area. According to the institute, there were no historical studies specifying the ground level in the project area. To check the groundwater level, a borehole of 150 m was performed by Orascom on-site and no ground water was found.  The Environmental and Social Action Plan (ESAP) was issued on the 5th of December 2015 and distributed to the plant (A copy was obtained).  A traffic management plan is already in place (obtained) and a designated contractor is hired for the transportation of oversized vehicles. The contractor is responsible for coordinating with the ministry of transportation.  The construction waste is segregated onsite. A waste management company (erteqa’a) collects the waste, sorts it and sends the recyclables back to the site for reuse. The final disposal of the waste is Erteqa’a’s responsibility. A waste log is kept onsite (samples were obtained).  Hazardous waste is sent to Petrotrade Company (waste oil and filters), another contractor is hired for the other hazardous wastes (contacted upon request). Samples of the hazardous waste disposal receipts were obtained.  Other data that was requested by email from Orascom included: - Hazardous waste register - Contracts for the waste management contractors (For all the wastes Erteqa’ and hazardous waste collection for disposal Nassreya) - Occupational Health and Safety Procedure - Emergency Response Procedure - Stacks permit - Water connection agreement - Ministerial or presidential Decree for land allocation.  A visit to the construction site was concluded with a tour by bus to check the current progress.

Environmental and Social Due Diligence for New Capital Power Plant 70