Notice

Category B project supported: Quiminha Rural Water Supply Project, Angola

Published 20 February 2024

1. Project description

UK Export Finance has agreed to provide support to the Ministry of Public Works, Urban Planning and Habitation of Angola (“the Buyer”)  in respect of the supply of goods and services by a number of UK-based exporters to the Ministry of Finance, Angola (“the Borrower”) for the construction and operation of Quiminha Water Supply Project.

A key aim of the Project is to provide the Quiminha region with a continuous and reliable water system to be used for domestic water needs and irrigation.

The Project includes:

• The rehabilitation and construction of  the hydromechanical, and auxiliary electrical infrastructure associated with the existing Quiminha dam, including construction of new water treatment and distribution infrastructure. The dam is a 41m high zoned earth fill embankment dam with a storage capacity of approximately 1,560 million m3

• The Project’s rehabilitation and construction works will focus on the engineering (design), supply and construction works on water catchment facilities, water transmission, storage and distribution infrastructure, and auxiliary electrical infrastructure.

• There are no Associated Facility (AF) to the Project.

UKEF is the only ECA on the Project.

2. Project sector

The Project is in the design and construction sector.

3. Project sponsors

The Project is being developed for the Ministry of Public Works of Angola acting through the Engineering Laboratory of Angola, by Elecnor Servicios y Proyectos SAU as EPC.

4. UK exporters

Elecnor SA / Elecnor Servicios y Proyectos SAU (“Elecnor”, the “Exporter”) will be responsible for procuring the UK content from a number of UK sub-contractors.

 5. Export Credit Agent Bank

Standard Chartered Bank.

 6. Amount of UK Export Finance support

The principal value of the support is approximately US$22.39 million.

7. OECD Common Approaches and Equator Principles

UK Export Finance categorised the Project as 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 their 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;
• PS6: Biodiversity Conservation and Sustainable Management of Living Natural Resources;
• PS8: Cultural Heritage;

The applicable World Bank Group EHS Guidelines were:

• EHS General Guidelines (2007)
• EHS Guidelines for Water and Sanitation (2007)
• Electric Power Transmission and Distribution (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:

• health and safety;
• Infrastructure and Equipment Design and Safety;
• wastewater treatment;
• waste and hazardous material management;
• emergency planning and response;
• worker conditions of contract and
• community engagement.

10. Assessment of ESHR impacts

A review was undertaken in line with the requirements of the OECD Common Approaches and Equator Principles 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: Environmental and Social Impact Assessment, Environmental and Social Management Plans, and Stakeholder Engagement Plan; 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.

Taking account of the review, the Project was deemed to have potential to cause a number of adverse environmental and social impacts both during construction and operation. However, a proposed suite of controls as part of the Project’s environmental and social management systems should facilitate the management of these impacts.

11. Climate change considerations

UKEF considered the potential direct and indirect green house gas (GHG) emissions of the Project 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” GHG emissions in excess of relevant thresholds for quantification and reporting set by international standards were reasonably not envisaged.

The review revealed that the Project design has considered potential physical impacts of climate change such as changes to rainfall and weather patterns.

12. Decision

Various actions have been agreed between the Project developer, operator, 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 goods and services by UK exporters to the Project.

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

UK Export Finance

February 2024