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Giza North Power Plant Project Q&As

November 20, 2012

Q. What are the objectives and benefits of the Giza North Power Plant project?

A. Giza North Power Plant project is part of a broader program which aims to help Egypt meet its growing demand for electricity and develop reliable, efficient, and sustainable sources of power. More specifically, it aims to improve the security and efficiency of the electricity supply within Egypt by adding new generation capacity based on efficient thermal power generation technology. The project comprises the construction of a gas-fired combined-cycle gas turbine (CCGT) power plant at Giza North near Cairo that will use the most efficient thermal power generation technology. In June 2010, the World Bank’s Board of Executive Directors approved a $600 million loan for the construction of a 1500 MW combined-cycle turbine power plant which meets the World Bank’s emission and discharge requirements. On February 14, 2012,  additional financing of $240 million was approved to fund the construction of an extra 750-MW CCGT unit at the Giza North power plant, and the associated gas pipeline and two 500 kV transmission lines, each with a length of approximately 25 KMs.  The additional unit will bring the total capacity of the plant to 2250 MW, sufficient to serve more than five million households.

Q. Where is the project located?

A.  The project is located in the North of Giza, on El-Beheiry canal in El-Kata village. The site is approximately 30 kilometers northwest of Cairo City.

Q. Does the Giza North Power Plant project strike the right balance between short term and long term development needs?

A. Given the importance of a reliable electricity supply, these kinds of public investments to expand generating capacity continue to be highly relevant to the country’s development. A reliable and sustainable power supply is critical for economic growth, employment creation, social services and public safety; issues that have taken on added significance in the wake of the ‘Arab Spring.’

Q. Do the objectives, structure and implementation of the Giza North Power Plant project take into account the specific circumstances of the present Egyptian context?

A. The project is part of a larger multi-year program in the energy sector, which includes large scale development of renewable energy (including through private investment and support from the Clean Technology Fund), as well as policy assistance for private investment, governance and regulatory reform, and energy efficiency. Extensive consultations were held with stakeholders during project preparation and have continued during the implementation phase. The Egyptian Electricity Holding Company (EEHC) has had extensive experience in managing environmental and social risks, having implemented numerous World Bank-financed energy projects. The World Bank is collaborating with EEHC and CEPC to strengthen their capacity as needed to ensure proper implementation of the environmental and social impact mitigation plans as well as enhanced benefits for the local population. In response to the new demands and to fit the new reality of the Egyptian society, the project is implementing the Grievance Redress Mechanism to empower and enable local communities and stakeholders to channel their concerns. The project is also taking into consideration the high unemployment rates and giving local communities priority when it comes to employment opportunities.

Q.  What are the key environmental and social issues associated with the project and how are they being managed?

A.  An Environmental and Social Impact Assessment (ESIA) was conducted prior to the implementation of the project, and was reviewed and approved by the Egyptian Environmental Affairs Agency and the World Bank.  Furthermore, a Resettlement Policy Framework (RPF) has been prepared to address cases of involuntary resettlement, or any potential acquisition of land related to the associated infrastructure; although both are expected to be minimal.  The ESIA includes a detailed environmental management and monitoring plan to address potential impacts. The ESIA was also updated to reflect the increased scope of the project resulting from the additional financing.  The implementing agency continues to implement the environmental management plan under the supervision of the World Bank.

Q. What is the nature of the complaints received by the World Bank on the impact of the Giza North Power Plant project?

A. The World Bank has received one complaint from four neighboring farmers living near the Giza North Power Plant. They contacted the World Bank in May 2012 through three non-governmental organizations. The farmers’ main complaint is that the construction of the power plant may have adversely impacted ground water levels and their agricultural production. The implementing agency, the Cairo Electricity Production Company (CEPC) and the contractor for civil works (ORASCOM) have taken actions to provide the affected farmers with water and to make adjustments to the farmers’ wells and pumps. They have also installed a number of piezometers to monitor groundwater levels in the project area. Groundwater monitoring is ongoing.  In addition, CEPC along with the contractor have taken measures to ensure that dust, waste and lighting at the power plant site are not adversely impacting neighboring farms.

Q. What is the potential project impact on ground water and agriculture?

A. A World Bank Senior Water Management Specialist has carried out a rapid preliminary assessment of the ground water situation and a key finding was that the project activities are not expected to have any permanent impact on water resources. The study will provide input to a more detailed study to be carried out by an agricultural expert who is in the process of being hired by the Giza North Project Management Team (GNPMT) to assess the impact of the power plant construction and operation; including potential impact of changes in groundwater levels, impact from the construction of the security wall surrounding the plant, and the effect of lighting and dust on agricultural production. The study has been completed. The results will determine the next steps.

Q. Has the World Bank received additional complaints since May 2012 besides those from the four farmers and what mechanisms have been put in place to handle any grievances?

A. Based on the recommendations of the World Bank, CEPC is strengthening its grievance redress mechanism by establishing a more systematic and structured process for screening, assessing and resolving grievances based on the principles of making the complaint handling process accessible, transparent and responsive to all groups and ensuring that complaints are addressed as promptly as practicable. The World Bank has provided a structured and clear process for grievance redress to ensure expeditious handling of complaints from the neighboring farms. The World Bank is also working closely with the CEPC and the GNPMT to provide detailed guidance and support on the development and implementation of handling complaints and processes for receiving, and addressing project-related grievances from affected communities and stakeholders. A one page leaflet in Arabic, explaining in simple terms the complaints handling mechanism has been prepared, endorsed by the Bank and has been disseminated to neighboring communities.

Q. Is the World Bank satisfied with the way the complaints have been handled?

A. In their discussions with the World Bank, including the most recent visit which took place in March 2013, the GNPMT has reconfirmed their commitment to address the complaints received from the farmers. CEPC has prepared an Action Plan to examine the potential impacts of the project, including those related to groundwater levels. Groundwater monitoring is ongoing and the reports are being shared with the World Bank. CEPC agreed to strengthen its complaints handling procedures and establish a Social Facilitation Committee which includes representatives of communities neighboring the site to ensure that the complaints handling process is accessible, responsive and timely. A clear transparent process for receiving and evaluating and addressing complaints has been established and a major component of this complaints handling/grievance redress mechanism is that the evaluation and mitigation of complaints that cannot be addressed at the project level will be handled by the Social Facilitation Committee. The Committee will use the findings of the report from the agricultural expert to inform its recommendations on addressing the pending complaints from the farmers. The GNPMT will ensure that information about the complaints handling procedures, as well as relevant project information is available to neighboring communities through existing public information centers. The project's Social/Grievance Officer will continue to interact regularly with neighboring communities and be available for follow up questions. The World Bank will remain closely engaged to ensure that provisions of the Action Plan are being implemented satisfactorily.

Q. What kind of consultations took place during the preparation and implementation of the Giza North project and has the World Bank met with the complainants?

A. The project benefited from extensive consultations during the preparation phase and continues to do so during implementation. Significant emphasis has been placed on disseminating timely information about the project and reaching out to communities near the power plant site.  CEPC is actively engaging with NGOs/youth centers/ Community Development Associations (CDAs) in both Qatta and Abo Ghaleb villages.

Several meetings/consultations have taken place between the World Bank the complainants and other stakeholders.  This is in addition to the public consultation meetings which took place during the preparation of the ESIA and RPF reports (January 2010). The World Bank will continue, during its regular field based reviews of the project, to consult with farmers and communities affected by the project, as well as interested stakeholders, CSOs and NGOs.