REHABILITATION WARSAK HYDROELECTRIC PROJECT

The Project comprises the modernisation and upgrade of a 50-year old hydropower plant, including a comprehensive rehabilitation programme designed to achieve an additional 40 years of safe, reliable and cost-effective energy production.

The project will increase the production capacity of Pakistan's energy supply by supporting renewable energy, which is conducive to sustainable economic growth and development and the eradication of poverty, in line with EU priorities and the country's national development objectives. The project supports the EU priority target of (global) climate change mitigation. It is in line with the external ALA mandate for climate change mitigation and promoting the development of environmentally sustainable energy.

An initial environmental examination (IEE) was prepared in August 2012 in accordance with the applicable national legislation. No formal EIA was considered necessary and the IEE proposed measures to adequately mitigate the social and environmental impacts. The environmental risks associated with this project are mainly related to site construction works; particular attention will be exercised in relation to the possible presence of PCBs (polychlorinated biphenyls) in the obsolete transformers which date from the 1960s. Social risks are primarily related to the health and safety, and security, of personnel hired to work on the construction sites. Working conditions will be required to conform to the relevant conventions of the International Labour Organisation. The project will be required to comply with the Bank’s environmental and social standards and practices. An environmental and social management programme (ESMP) will be required to be in place prior to the start of construction. The ESMP will require the approval of the AFD, which as Lead Financier under the Mutual Reliance Initiative agreed between the EIB, AFD and KfW for operations outside the EU will be responsible for the environmental and social due diligence of the project.

The promoter will be required to implement the project in accordance with AFD procurement rules and procedures, and in compliance with the requirements and standards agreed between EIB, AFD and KfW for projects under the Mutual Reliance Initiative for operations outside the EU, as foreseen in the Bank’s Guide to Procurement. In particular, calls for international tenders will be published in the OJEU in accordance with the Bank's Guide to Procurement.

This operation is covered by the EU Guarantee for EIB loans outside the EU.