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Ethiopia Transport (L.A.P.S.S.E.T) Corridor Project PROJECT INFORMATION MEMORANDUM (PIM) Final Version

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Ethiopia Transport (L.A.P.S.S.E.T) Corridor Project PROJECT INFORMATION MEMORANDUM (PIM) Final Version AFRICAN DEVELOPMENT BANK GROUP NEPAD – IPPF NEPAD – Infrastructure Project Preparation Facility (NEPAD – IPPF) Support to LCDA for Transaction Advisory Services and Technical Assistance for Lamu Port Development PHASE 1 Lamu Port South Sudan – Ethiopia Transport (L.A.P.S.S.E.T) Corridor Project PROJECT INFORMATION MEMORANDUM (PIM) Final Version Prepared by: Reviewed by: Alex Ndiku MBARAGA Codo PAMPHILE Infrastructure Specialist (Transport Sector) Principal Infrastructure Specialist ONRI/NEPAD - IPPF ONRI/FPPI-NEPAD Email: [email protected] Email: [email protected] Approved by: Shem SIMUYEMBA Division Manager, NEPAD - IPPF Email: [email protected] Date of Final Submission: 22nd November 2016 Page i Table of Contents EXECUTIVE SUMMARY ................................................................................................................................. iii SUMMARY TABLE ......................................................................................................................................... iv LIST OF ACRONYMS .................................................................................................................................... vii LOGICAL FRAMEWORK (ENGLISH VERSION) ................................................................................................ 1 CADRE LOGIQUE (VERSION FRANÇAIS) ....................................................................................................... 2 1. INTRODUCTION ..................................................................................................................................... 3 2. A SYNOPSIS ON LAPSSET CORRIDOR PROJECT .................................................................................. 3 3. LAMU PORT DEVELOPMENT PROJECT .................................................................................................. 5 3.1 Planned Implementation of Lamu Port Development Project ....................................................................... 5 3.2 Potential Exports and Imports via Lamu Port ............................................................................................. 6 4. TRANSACTION ADVISORY SERVICES AND TECHNICAL ASSISTANCE SUPPORT .................................. 6 5. JUSTIFICATION FOR NEPAD – IPPF FUNDING ....................................................................................... 8 6. KEY OBJECTIVES AND OUTCOMES ....................................................................................................... 9 6.1 Key Objectives ....................................................................................................................................... 9 6.2 Key Outcomes........................................................................................................................................ 9 7. RISKS AND MITIGATION ....................................................................................................................... 10 8. IMPLEMENTATION STRATEGY ............................................................................................................. 10 9. ENVIRONMENTAL, SOCIAL AND GENDER STRATEGY ......................................................................... 11 9.1 Environmental and Social Management Assessment ......................................................................... 11 9.2 Gender and Social Equality ............................................................................................................. 11 10. PROJECT BANKABILITY ................................................................................................................... 11 11. COST AND FINANCING ..................................................................................................................... 11 12. PROCUREMENT AND DISBURSEMENTS .......................................................................................... 13 12.1 Procurement Arrangements ................................................................................................................. 13 12.2 Disbursement of Funds ....................................................................................................................... 14 13. FINANCIAL MANAGEMENT, MONITORING AND REPORTING ............................................................ 14 14. CONCLUSIONS AND RECOMMENDATIONS ...................................................................................... 15 APPENDIX – A1 LAPSSET Corridor Projects and Regional Integration ............................................................... 16 APPENDIX – A2 Land Usage Plan for Lamu Port Development ......................................................................... 17 APPENDIX – A3 Architectural View of Proposed Three Berths at Lamu Port ....................................................... 18 APPENDIX – A4 Terms of Reference .............................................................................................................. 19 Page ii EXECUTIVE SUMMARY Lamu Port South Sudan – Ethiopia Transport (LAPSSET) Corridor Project is an infrastructure project dedicated to interconnecting the East African countries of Kenya, Ethiopia and South Sudan. Kenya is spearheading the implementation of the LAPSSET Corridor Project. Completion of the LAPSSET Corridor Project will strengthen the position of the East African region as a gateway and transport – logistical hub. LAPSSET Corridor Project comprises of two (2) key elements: a. an infrastructure corridor of about 500 m wide, where the road, railway, pipelines, power transmission and other projects, including, proposed Lamu Port with thirty-two (32) Deep Sea Berths at Manda Bay; b. an economic corridor of about 50 km on either side of the infrastructure corridor where the industrial investments shall be situated; The LAPSSET Corridor Project is a regional project with enormous economic viability, and upon its completion, the Project will facilitate trade, promote regional economic integration and interconnectivity, among other benefits. With good understanding of LAPSSET Corridor Project’s regional impact, a comprehensive assessment of the entire Project was carried out. Based on this assessment, Lamu Port Development specifically, the transaction advisory services and technical assistance were identified as components required for the successful realisation of the entire LAPSSET Corridor Project. The key objectives of developing Lamu Port at Manda Bay include, providing the much needed Sea Port and transport link to serve the ‘ever-increasing’ import and export cargo base from Ethiopia, Kenya and South-Sudan, among other countries. Within its strategic framework, the LAPSSET Corridor Development Authority (LCDA – the Executing Agency) plans to operate and finance the development of Lamu Port through private sector investment/concession. In particular, the proposed thirty-two (32) Berths at Lamu Port shall be secured, operated and maintained as follows: a. the first three (3) Berths shall be secured by concession to the private sector for operation; b. the reminder twenty-nine (29) Berths shall be procured either by concession or other financial structure principally, for construction and operation; Following LCDA’s strategy and in line with Lamu Port Development, transaction advisory services and technical assistance remain key requirements. The Transaction Advisory Services shall help setup the ‘much needed’ and viable Transaction Plan for the development of Lamu Port. It is essential that the resultant Transaction Plan feasibly maps out all the key factors of the proposed Project, defines the transaction structure along with the scope and volume of the project in addition to defining the Project Parties and their contributions, among others. The Technical Assistance (TA) is targeted for specific activities/tasks including, stakeholder engagement and consultation, as part of ESIA, inter alia. A NEPAD – IPPF Grant not exceeding USD 1,936,560 (i.e. One million, nine hundred and thirty-six thousand, five hundred and sixty, United States Dollars only), equivalent to 90% of the total project cost. A total of USD 205,030 (10%) shall be secured from the government of Kenya. With good consideration of the capacity of executing agency (LCDA) and the project, it is recommended that the Bank approves the Grant as part of the preparation measures essential for the development of Lamu Port at Manda Bay. Page iii SUMMARY TABLE PROJECT NAME Lamu Port South Sudan – Ethiopia Transport (LAPSSET) Corridor Project Region Eastern Africa Participating Countries Ethiopia, Kenya and South-Sudan Lead Country Kenya Executing Agency LAPSSET Corridor Development Authority (LCDA) i. Port at Manda Bay, Lamu (Lamu Port Development Project) ii. Standard Gauge Railway (SGR) Line to Juba (South Sudan) and Addis Ababa (Ethiopia) LAPSSET Corridor Project iii. Road Network (Seven Specific Projects) iv. Oil Pipeline (South Sudan and Ethiopia) v. Oil Refinery at Bargoni in Lamu County (Coastal Line in Kenya) vi. Three Airports vii. Three Resort Cities at Lamu, Isiolo and Lake Turkana Shores LAMU PORT DEVELOPMENT : TRANSACTION ADVISORY AND TECHNICAL ASSISTANCE PHASE I NEPAD – IPPF Funding Lamu Port Development - Transaction Advisory Services and Technical Assistance Support Sector Transport Sector (Sea-Port Transhipment/Cargo Handling) NEPAD – IPPF US $ 1,936,560 (90%) Budget Government of Kenya (GoK) US $ 205,030 (10%) Total Project Cost US $ 2,141,590 (100%) Justification of Lamu Port Improve inter-regional trade for importers
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