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| Summary of Project Information (SPI) |
| This Summary of Project Information is prepared and distributed to the public in advance of the IFC Board of Directors’ consideration of the proposed transaction. Its purpose is to enhance the transparency of IFC’s activities, and this document should not be construed as presuming the outcome of the Board decision. Board dates are estimates only. |
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| Project number | 20055 |
| Project name | Sokhna Port Development Company |
| Country | Egypt |
| Sector | Transportation And Warehousing |
| Department | Infrastructure |
| Company name | DP World Sokhna |
| Environmental category | B |
| Date SPI disclosed | January 13, 2004 |
| Projected board date | February 19, 2004 |
| Status | Active |
| Previous Events | Invested: April 4, 2005
Signed: April 15, 2004
Approved: March 4, 2004 |
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| Description of company and purpose of project |
The Sokhna Port Development Company (SPDC or the company) operates the Port of North El Sokhna (Sokhna or the Port) under a 25-year concession agreement awarded in mid-1999. The Port began commercial operations in October, 2002, and is the first fully private port operating in Egypt. It provides a deep water facility able to handle post-panamax vessels serving the Cairo area as well as the Suez Special Economic Zone (SSEZ), a 9,000 ha industrial development zone being developed adjacent to the Port. The Port benefits from a strategic location close to the southern entrance of the Suez Canal where it can become a gateway for cargo between Egypt and Asia as well as East Africa.
The proposed project is to help finance the company’s 2001 – 2004 equipment and civil works investments. The project will help complete the first two phases of the company’s operating plan for the container, bulk, general cargo, and fertilizer terminals at the Port and increase the container terminal’s capacity to 250,000 TEUs per year. |
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| Project sponsor and major shareholders of project company |
The project sponsors are Orascom Construction Industries (OCI) and Captain Ossama Al Sharif. Listed on the Cairo Stock Exchange, OCI is Egypt's largest construction and building materials conglomerate with a primary focus on construction and cement. Captain Al Sharif is a Jordanian national and has been in the shipping business since his graduation from the Alexandria Maritime Academy. He founded ECHCO in 1997, the first authorized private container handling company in Egypt, and has acted as its Chairman and Managing Director since inception.
SPDC’s ownership structure is as follows:
ECHCO 70%
Captain Al Sharif 15%
Coral Holdings 10%
Mr. Al Tantawy 5%
Total 100%
Since ECHCO is a 50/50 joint venture between OCI and Captain Al Sharif, the two parties own, directly and indirectly, a combined 85% of SPDC. Coral Holdings Investment Ltd. is a UK based investment vehicle. Mr. Al Tantawy has served as ECHCO’s General Manager since 1997. |
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| Total project cost and proposed IFC investment |
The total project cost is estimated at $97 million. The proposed IFC investment is a $20 million A loan for IFC’s own account. |
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| Location of project and description of site |
Sohkna is located 150 km south-east of Cairo and 40 km south of the Suez Canal on the Red Sea. It is connected to the main rail network via a spur off the Cairo to Suez line. There are also two roads connecting the Port to Cairo. The first road (Road 24) leads from Cairo eastward to Suez city and then south to Sokhna port along the Red Sea. The second road (Road 23) route takes a south – east direction from Cairo’s ring road until it reaches the coastal Red Sea road a few km north of Sokhna. |
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| Project Development Impact and IFC's Role |
The project’s development impact will be substantial as Sohkna develops into the gateway of choice for Egyptian trade to and from Asia and the Middle East. Asian and Middle Eastern cargo volumes are expected increase in the future, but a lack of adequate port facilities could restrict growth. The proposed IFC investment will strengthen the Egyptian port sector by providing a well managed and efficient container and general cargo facility. This, in turn, will give shipping lines and shippers a significant incentive to call on Sokhna to avoid additional costs and delays of navigating through the Suez Canal to call on Mediterranean ports. Sokhna’s improved customs procedures, EDI systems and increased productivity will also incentivize other Egyptian and regional ports to improve their procedures and efficiency. This should lower the delivered cost of both imported and exported goods and stimulate new export activities, thereby benefiting shippers, shipping lines and consumers alike. New export activities would also improve Egypt’s balance of trade and bring foreign currency to Egypt.
The project will provide revenues to the Government of Egypt (GOE) in the form of fees paid to the Red Sea Port Authority and additional employment and upgrading of skills for local employees. Furthermore, the development of Sokhna will encourage further development of the SSEZ as well as warehousing, light/medium manufacturing and regional distribution, thus enhancing economic activity in the region and providing greater employment opportunity for the local population. As the first privately owned and operated port facility in Egypt, Sokhna will also improve the transfer of know-how from international port experts to the local management and staff.
IFC’s funding would support GOE’s efforts in attracting private capital to public infrastructure. IFC’s funding would also bring foreign currency lending at a tenor which is essential for this project but not available from local or other foreign sources. This would provide a strong demonstration effect for future similar projects as a market based limited recourse financing for an Egypt based infrastructure project with local sponsors. The sponsors have asked for IFC’s participation to benefit from IFC’s accumulated experience in structuring successful financing arrangements and in advising with terminal operations. |
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| Environmental and social issues - Category B |
This is a Category B project. The review of this project consisted of an Environmental Impact Assessment (EIA) for the project completed by the Dutch consultants Solid Waste Consultancy B.V., discussions with staff who visited the project site, and a telephone conversation and information exchange with the Sokhna’s Security, Safety and Environmental Manager.
The following potential environmental, health, and safety impacts of the project were analyzed:
- environmental, health and safety management
- site selection;
- maintenance dredging;
- stormwater management;
- handling and storage of dangerous cargos and hazardous materials;
- waste management;
- emissions to air; and
- emergency response planning and preparedness.
SPDC has presented plans to ensure that its facilities will operate in a manner that complies with applicable laws and regulations and IFC’s current guidelines and policies. A more complete description of environmental mitigation measures is provided in the Environmental Review Summary.
To view the environmental documents for this project, click here |
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| Location of environmental documents in locally affected community |
The environmental documentation will be available at the gate of the Sokhna Port and at IFC’s office in Cairo starting January 18, 2004.
Port Address: Sokhna Port, Suez, Egypt.
IFC Office in Cairo: International Finance Corporation, World Trade Center Building, Corniche El Nil, Boulac, Cairo, Egypt |
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| To contact the project company, please write to: |
Mohamed Hassaan
Sokhna Port Development Company
29, Farid Street
Heliopolis, Cairo
Egypt 11341
Phone: (202) 414 9944 |
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