FCS RE Azito 4

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The proposed project (“Azito Phase 4” or “project”), developed by Globeleq Africa Holdings Limited (“Globeleq”) and Industrial Promotion Services (West Africa) (“IPS ((WA)”) (together the “Sponsors)”), is an expansion of the existing Azito Energie S.A. (“Azito Energie” or the “company”) power plant in Abidjan, Côte d’Ivoire. The project will be built and operated by Azito Energie and Azito Operation and Maintenance S.A. (“Azito O&M”), respectively.The existing thermal power plant consists of a combined cycle gas-fired power station with a total capacity of ~427 MWe, developed in three phases, all financed by IFC. Two 144 MWe simple cycle gas turbines were commissioned in March 1999 (Phase 1) and February 2000 (Phase 2), respectively, and were subsequently converted into a combined cycle in 2015 with the addition of two heat recovery steam generators (HRSG) and a 139 MWe steam turbine (Phase 3). The environmental and social (E&S) information related to the previous phases (1 to 3) is disclosed on the IFC Project Information Portal at https://disclosures.ifc.org/#/projectDetail/SPI/8503 and https://disclosures.ifc.org/#/projectDetail/SPI/26619. The Azito 4 expansion project will add one combined cycle gas turbine, including a gas turbine and steam turbine with air-cooled condenser bringing the total installed capacity of the Azito complex to ~680 MWe.  The proposed IFC investment includes an IFC A Loan and client risk management instruments (interest rate and/or foreign currency hedging) for an aggregate amount of up to the Euro equivalent of US$ [60] million. In addition, IFC will be mobilizing the remaining balance of the required debt amount for the Project. The existing Azito thermal power plant, where the expansion will take place, is located on a 6 ha plot of land near the Azito village in Yopougon District, approximately six kilometres west of the port of Abidjan in Côte d’Ivoire. The plant premises are located alongside the western arm of the Ebrié lagoon. Béago, a second village is located about 300 m northeast from the plant boundary. The plant premises are bordered along the northern fence by two gas treatment units, independently operated by Foxtrot International and PetroCI, which provides condensate-free feed gas to Azito power plant. An electrical switchyard, located next to the western fence, is operated by the Compagnie Ivoirienne d’Electicité (CIE – national electricity distribution company). A large construction site, located east of the thermal power plant, is manufacturing large precast concrete caissons used for the extension of the port of Abidjan. Azito Phase 4 is comprised of one gas turbine coupled with a generator, one HRSG, and one steam turbine coupled with a generator; air-cooled condenser; control and electrical building; water treatment building; warehouses; 225kV switchyard; and 400kV Gas-Insulated Switchgear (GIS).  The Government of Côte d’Ivoire is undertaking a national program to improve its power transmission network around Abidjan with the proposed development of a new 400kv transmission line. Anticipating a future 400kV connection, Azito Phase 4 will expand its existing switchyard, and install a new 400kV GIS to enable connection to the grid at either 225kV or 400kV.  Proposed switchyard expansion and new GIS will all be located within the existing Azito Energies site. The duration of the construction works will be approximately 30 months. It is anticipated that the new gas turbine will run in open cycle-mode for approximately 12 months until the plant achieves combined cycle operation. The gas turbine will be operated primarily on domestic natural gas, with the option to use distillate diesel oil (DDO) as backup fuel during emergencies. Natural gas for the plant comes from three sources in Côte d’Ivoire. A gas treatment unit (to separate producing condensate and water) owned and operated by Foxtrot International and located along the northern fence of the Azito power plant, supplies natural gas and has sufficient capacity to support the expansion.The land occupied by the existing Azito power plant consists of a 30 ha lot that was acquired by the GoCI from the Village of Azito prior to the construction of the existing power plant (Phase 1 and 2) and ceded to Azito Energie under a concession agreement. Following various protests by Azito villagers, an agreement was reached in December 2007 and Ivoirian authorities and representatives of Azito Village signed a protocol for cash compensation (in lieu of 5 ha) and alternate land allocation of 25 ha. The cash compensation was paid by the GoCI but the 25 ha allocation remains pending. Discussions between the claimants and GoCI continue as the GoCI remains responsible for the negotiations and settlement of compensation as per the concession agreement.   Separately, a new claim was received by the World Bank Office in Abidjan in November 2017 by a new group of people alleging to have been impacted by Phases 1 and 2 of the Azito project.  This new group alleges that in 1998 they were displaced by the GoCI, without compensation, from a property they were occupying in Yopougon in order to make room for the people from the village of Azito who were being resettled by the GoCI. The IFC/WB met with the claimants in January 2018 to hear their views and formally referred the issue to the GoCI, requesting them to engage and find a solution with these new claimants.   The temporary lay down areas for the construction material during the construction phase will occupy some land located outside the site boundaries but these should remain within the existing 300 m exclusion zone around the existing power plant. The company will negotiate a rental agreement with the communities that still holds the traditional ownership rights on these lands. No workers’ accommodation camps will be used during the construction phase. The majority of construction workers will be locally hired from the Abidjan metropolitan area and other personnel with specialized technical skills brought from outside this area could be accommodated in rented properties in the communities near the site, as it was previously done for the Phase 3 construction. Construction material, and project equipment will be transported via existing public access roads and possibly by barges from the port of Abidjan.