The World Bank last Thursday approved a $20 million loan to finance the second phase of the Second Pollution Abatement Project (SPAP) for the Republic of Egypt.
One of the main objectives of SPAP is to demonstrate applicability of market-based instrument for promoting industrial pollution abatement in hotspots located in the areas of Alexandria and Greater Cairo. This project will provide assistance to the Egyptian government for improving its environmental management capabilities in continuation of the successful collaboration that was developed during Phase 1 over the past several years.
“With this project, Egypt is considered the first country to receive the largest resources on pollution control from the World Bank and its partners. It is a demonstration of global commitment to the Millennium Development Goals, commented Hocine Chalal, the project’s Task Team Leader.
The World Bank $20 million loan succeeded in attracting an additional $145 million of concessionary lending and grants from: The Japan Bank for International Cooperation (JBIC); The European Investment Bank; Agence Française de Développement; and the Government of Finland are now completing the steps for securing their participation to SPAP.
The project will be also accompanied by a parallel operation to be financed by the Global Environment Facility (GEF) for an estimated amount in the order of $7.5 million. GEF’s support will focus on the conservation, protection and development of Lake Mariout of Alexandria, one of the pollution hotspots in Egypt. This will also address the regional concern of pollution of the Mediterranean.
SPAP includes essentially two components: An Environmental investments component that will focus on pollution abatement in major hot spots in Alexandria and Greater Cairo areas. These investments will target the industrial sector through soft loans targeting pollution abatement measures. The second component is a technical assistance one to provide the necessary expertise to the financial sector, the beneficiary companies to be selected and the Egyptian Environmental Affairs Agency on regulatory and institutional aspects.
Across the MNA region, Egypt will also be the first to receive revenues from the carbon business finance for the purchase of verified emission reductions from the Alexandria landfill. The project is expected to have a significant impact on environment reduction in Alexandria and around Lake Mariout, in particular.
