Notice

Category B project supported: Ministerial City Project, Benin

Published 19 October 2022

1. Project description

UK Export Finance (UKEF) has agreed to provide support to the Government of Benin, represented by the Ministry of Economy and Finance, to facilitate the construction of a new governmnet building complex in Cotonou, Benin. Société Immobilière et d’Aménagement Urbain (SimAU), a partnership between the government and various financial institutions, will be responsible for the operations and maintenance of the ministerial city and ACC Benin & UK JV (ACC – “the Exporter”) will provide construction and engineering services.

The Project comprises the design, construction, equipping and operation of a new governmental building complex in Cotonou, southern part of Benin. Upon completion it will house 21 ministires on an area of five hectares. It will have ten office buldings with five levels and catering buidling of three levels, with green spaces around each bulding.

The Project does not include any Associated Facilities^{[footnote 1]}

2. Project sector

The Project is in the civil construction sector.

3. Project sponsors

The Project is being developed by SImAU. ACC will provide construction and engineering services for the Project.

4. UK exporters

An unincorporated joint-venture formed between Arabian Construction Company Benin SAS and Arabian Construction Company UK Group Limited called “ACC Benin & UK JV”.

5. Export Credit Agent Bank

Deutsche Bank AG

6. Amount of UK Export Finance support

The Project is a hybrid Direct Lending / Buyer Credit Facility for €121,171,546.03.

7. OECD common approached and equator principles

UKEF categorised the Project as a Category B i.e. having environmental, social and human rights (ESHR) impacts that are few in number, site-specific, few (if any) of which are irreversible, and for which mitigation measures are more readily available) in accordance with the definition in the 2012 (Revised 2016) OECD Common Approaches for Officially Supported Export Credits and Environmental and Social Due Diligence (the “OECD Common Approaches”) and the Equator Principles (2020).

8. Environmental, social and human rights standards

Project related ESHR documentation was reviewed for alignment against the 2012 International Finance Corporation (IFC) Performance Standards (PS) on Environmental and Social Sustainability and the World Bank Group Environmental, Health and Safety (EHS) Guidelines.

The applicable IFC PS were:

• PS1: Assessment and Management of Environmental and Social Risks and Impacts;
• PS2: Labour and Working Conditions;
• PS3: Resource Efficiency and Pollution Prevention;
• PS4: Community Health, Safety and Security;
• PS5: Land Acquisition and Involuntary Resettlement;
• PS6: Biodiversity Conservation and Sustainable Management of Living Natural Resources; and
• PS8: Cultural Heritage.

The applicable World Bank Group EHS Guidelines were:

• General EHS Guidelines (2007); and
• EHS Guidelines for Construction Materials Extraction (2007).

9. Nature of ESHR impacts

The review of potential ESHR risks and impacts took into account the following impacts, receptors and issues during the construction and operational phases of the Project:

• Worker welfare and occupational health and safety;
• Grievance mechanisms;
• Emergency planning and response;
• Noise, vibrations, dust and air emissions;
• Climate change;
• Hazardous materials, waste and drainage management;
• Water and energy resources;
• Community engagement;
• Community health, safety and security;
• Traffic management;
• Land acquisition;
• Biodiversity; and
• Cultural heritage.

10. Assessment of ESHR impacts

A review was undertaken in line with the requirements of the OECD Common Approaches to identify potential ESHR risks and impacts of the Project and how these would be effectively managed.

The review included:

• Desk-based review of Project-related documentation, including Environmental and Social Impact Assessment (ESIA), Environmental and Social Management Plan, and Stakeholder Engagement Plan;
• Site visits to the Project area conducted by the ESIA team.; and
• Follow-up meetings and interviews with relevant Project representatives.

The results of this review formed the basis for the evaluation of the Project’s alignment with relevant international standards, and recommendations for future compliance and monitoring.

11. Climate change considerations

UKEF considered the Project’s potential direct and indirect greenhouse gas (GHG) emissions and effects of climate change factors on the Project as part of its ESHR review.

The Project is not considered to be a carbon intensive undertaking (such as fossil fuels or petrochemical) and so “high” Scope 1 and 2 emissions in excess of relevant thresholds for quantification and reporting set by international standards were reasonably not envisaged. The Project design has considered potential physical impacts of climate change such as flooding and wildfires.

12. Decision

Various actions have been agreed between the Project developers, operators, and parties involved in the financing, which are necessary to ensure the Project’s on-going alignment with international standards. Following agreement of these commitments, it was concluded that the Project should meet the relevant international standards over the Project cycle. UKEF has therefore decided to provide its support in respect of the supply of capital goods and services by UK exporters to the Project.

A condition of support is that the Project will be subject to environmental and social monitoring to provide satisfaction that the Project is aligned with the relevant international standards throughout the duration of support.

UK Export Finance

October 2022

1. The OECD Common Approaches defines “Associated Facilities” as: those facilities that are not a component of the project, but that would not be constructed or expanded if the project did not exist and on whose existence the viability of the project depends; such facilities may be funded, owned, managed, constructed and operated by the buyer and/or project sponsor or separately from the project. ↩