Implementation of the four Horizon 2020 priority investment projects closer

on 10 March 2014.

Following the completion of the feasibility studies for the four priority pollution reduction projects in 2013, MeHSIP-PPIF’s focus turned to facilitating the final steps to financing these projects. MeHSIP-PPIF continued working closely with Promoters and the EIB to facilitate the process of closing the financing. Two out of the four investment projects (Lake Bizerte in Tunisia and Kafr El Sheikh in Egypt) have been approved for financing by the EIB and are in the process of securing funding from a co-financier. The project in Lebanon (Al Ghadir) is also attracting strong interest from financing institutions and should be able to move forward. For Jordan, despite the economic situation in the country not allowing the project to proceed further at the moment, the feasibility study prepared by MeHSIP-PPIF has provided a solid basis once the discussions between IFIs/donors and the Government will resume. Finally, three of the investment projects have secured grant support from the Neighbourhood Investment Facility (NIF).

• Lake Bizerte, Tunisia [investment value: 80m EUR]: the feasibility study covering various investment activities for pollution reduction in solid waste, wastewater and industrial emissions was submitted in September 2013. The study was carried out in two phases (diagnostic and feasibility) through an intense participatory process supported also by the Horizon 2020 Capacity Building Component and the Mediterranan Environment Programme, involving all stakeholders in the Bizerte region, including the Civil Society. Consultation led to an extension of the scope of the study and resulted in the inclusion of new investment components as well as support for capacity building, project management and project governance structures. A key milestone was achieved through the submission of an official request for financing from the Government of Tunisia to the EIB following completion of the appraisal process by the EIB. Work was also carried out to finalise the NIF application that was approved in 2013. Several EIB missions were undertaken since the inception of project preparation in late 2010 and a final appraisal mission took place in October 2013. In December 2013 the project was approved by the EIB Board and the finance contract was signed with the Tunisian Government. The European Bank for Reconstruction and Development (EBRD) has shown keenness to co-finance based on the studies presented by MeHSIP-PPIF and participated in a joint mission with the EIB in October 2013 and undertook a due diligence mission in January 2014. A crucial element for success is the continuous level of commitment and support for this integrated pollution reduction project by all parties involved at the level of central Government, local Government and the communities surrounding Lake Bizerte. The project has also been labelled by the Union for the Mediterranean.

• Lake Burullus/Kafr El Sheikh, Egypt [investment value: 163.5m EUR]: The feasibility study, including detailed design for two ‘village clusters’, was completed in April 2013. MeHSIP-PPIF identified from lessons learnt on other similar development projects that difficulties in relation to contract strategy, cost estimates and issues with the tendering process often lead to significant delays in project implementation. In order to overcome these problems, MeHSIP-PPIF broadened the scope of the feasibility study to include preparation of tender documents for the two priority clusters in order to demonstrate that the contract implementation strategy being adopted is appropriate and to obtain more accurate cost estimates for the project components. Based on the final feasibility study, the European Bank for Reconstruction and Development (EBRD) has also expressed interest in co-financing this project. Accordingly the EIB and EBRD conducted a combined appraisal mission to the country and discussed details of the project components and the institutional set-up for the way forward. MeHSIP-PPIF continued providing support throughout the appraisal process with a full supporting/technical team during the missions. The project was approved by the EIB Board in 2013. Currently the EBRD is undergoing its due diligence and are expected to present the project to their board in the first quarter of 2014. Finally, the project has been given a preliminary approval for a substantial NIF grant (EUR 20m).

• Al Ghadir, Lebanon [investment value: 100-150m EUR]: the feasibility study, that included an extension and upgrade of the wastewater treatment plant and missing priority sewer networks and collectors for the Greater Ghadir Basin, as well as detailed field survey and verification of priority networks, has been completed. Both key Government counterparts promoting this project (the Council for Development and Reconstruction (CDR) and the Ministry of Energy & Water) are committed to bringing this project to fruition. EIB carried out a pre-appraisal mission for the investment project in March 2013. Agreement was reached between the EIB and the Government that a full appraisal mission should take place in 2014 and a clear interest by a potential co-sponsor has been expressed to co-finance the project.

• Al Ekaider, Jordan [investment value: 39m EUR]: following extensive liaison with key stakeholders, MeHSIP-PPIF completed the feasibility study for a project that comprised closure and rehabilitation of the old dumpsite and the sludge lagoons and development of a new sanitary landfill supplemented by recycling and composting facilities aimed at creating an integrated SWM approach for the new site. Solutions and options for the liquid sludge as well as discharges from olive oil mills (Zibar) were also proposed and an Environmental and Social Impact Assessment (ESIA) prepared. The study also included a full financial and economic analysis following consultations with the Government and EIB. During 2013, MeHSIP-PPIF assisted the EIB in following closely the process initiated by the Government of Jordan for formalising a request for financing. The Agence Française de Développement (AFD) also continued in assisting the process, but to date the Government has not yet taken a decision on committing for a financing plan for this project due to the current economic situation in the country.

Euro-Mediterranean environment ministers backed the development of a pipeline of pollution reduction projects that are both environmentally significant for the region and financially viable for a lending institution. The Mediterranean Hot-Spot Identification Programme – Project Preparation and Investment Facility (MeHSIP-PPIF) supports the Horizon 2020’s component for investments in pollution reduction projects in the south Mediterranean partner countries. The overall objective of MeHSIP-PPIF is to identify and prepare high priority, sustainable investment projects which will make a significant contribution to the de-pollution of the Mediterranean. The investment projects derive mainly from the so called "hot spots" as identified under the National Action Plan (NAP) exercise coordinated by the United Nations Environment Programme/Mediterranean Action Plan (UNEP/MAP) and the European Commission. By providing assistance in project development, MeHSIP-PPIF aims to speed up project financing by the European Investment Bank (EIB) and other financial institutions such as the World Bank, the French Development Agency and the German Development Bank (KfW) that would lead to project implementation and H2020 commitments. MeHSIP-PPIF is funded through the EU’s FEMIP Support Fund (Facility for Euro-Mediterranean Investment and Partnership) and managed by the EIB. Phase I took place between March–December 2009, whereas Phase II started in February 2010 and was completed by the end of 2013.