Notice

Category A project supported: Tema-Aflao Road, Ghana

Published 17 August 2021

1. Project description

UK Export Finance (UKEF) has agreed to provide support to the Ministy of Finance and Economy, Ghana and the Ministry of Roads and Highways, Ghana for upgrading a 17km stretch of the existing Tema-Aflao Road in the greater Accra region of Ghana. BHM Construction UK Limited (the Exporter) will supply design and construction services. The Ghana Highways Authority will be responsible for the operation and maintenance of the road.

The existing road experiences significant congestion and the overall Project objectives are to enhance the capacity of the road and by doing so reduce travel times, road accidents and freight transport costs along the route, and hence facilitate trade and transit in the West African sub-region. The Project will convert the existing single carriageway into a three carriageway expressway. The main Project components are:

• Three carriageway expressway consisting of three lanes per direction of 3.65 m lane width (six lanes in total)
• Central barrier to prevent U-turns and unauthorised pedestrian crossings
• Three interchanges to control entry and egress onto the highway
• Service roads on each side that provide access for local traffic to the interchanges and keep the fast-flowing traffic separate from the local traffic
• Pedestrian facilities including footbridges and pedestrian and cycle paths adjacent to service roads

The road will also be equipped with expressway lighting, line marking, traffic signs, road studs, appropriate fencing and barriers to limit uncontrolled access to the expressway, and improved drainage and culverts, as well as road verge improvement.

The Project does not include any Associated Facilities^{[footnote 1]}.

2. Project sector

The Project is in the civil construction sector.

3. Project sponsors

The Project is being developed by the Ghana Highways Authority, part of the Ghanaian Ministry of Roads and Highways. BHM Construction UK Limited will supply design and construction services. The Ghana Highways Authority will be responsible for the operation and maintenance of the road.

4. UK exporters

BHM Construction UK Limited.

5. Export credit agent bank

JP Morgan.

6. Amount of UK Export Finance support

The principal value of UKEF support is approximately USD 92 million.

7. OECD Common Approaches and Equator Principles

UKEF categorised the Project as a Category A (having potentially significant environmental, social and human rights (ESHR) impacts) in accordance with the definition in the 2012 (Revised 2016) OECD Common Approaches for Officially Supported Export Credits and Environmental and Social Due Diligence (the “OECD Common Approaches”) and the Equator Principles (2020).

As required by the OECD Common Approaches, UKEF disclosed its potential involvement in the Project. A notification was posted on the UKEF website on 15 May 2020, which provided a description of the Project, a contact point to signpost interested parties to environmental and social information, and links to the environmental impact assessment. No enquiries were received by UKEF or the contact point as a result of this notification.

7.1 Environmental, Social and Human Rights Standards

Project related ESHR documentation was reviewed for alignment against the 2012 International Finance Corporation (IFC) Performance Standards (PS) on Environmental and Social Sustainability and the World Bank Group Environmental, Health and Safety (EHS) Guidelines. The applicable IFC PS and World Bank Group EHS Guidelines were:

• PS1: Assessment and Management of Environmental and Social Risks and Impacts
• PS2: Labour and Working Conditions
• PS3: Resource Efficiency and Pollution Prevention
• PS4: Community Health, Safety and Security
• PS5: Land Acquisition and Involuntary Resettlement
• PS6: Biodiversity Conservation and Sustainable Management of Living Natural Resources
• PS8: Cultural Heritage
• World Bank Group General EHS Guidelines (2007)
• World Bank Group EHS Guidelines for Toll Roads (2007)
• World Bank Group EHS Guidelines for Construction Materials Extraction (2007)

8. Nature of ESHR impacts

The review of potential ESHR risks and impacts took into account the following impacts, receptors and issues during the construction and operational phases of the Project:

• air emissions
• noise and vibration
• soil quality
• waste, including hazardous waste
• wastewater
• biodiversity
• land acquisition and livelihood impacts
• management of third-party contractors and suppliers
• grievance mechanisms
• occupational and community health and safety
• emergency planning and response
• cumulative impacts
• worker welfare
• cultural heritage
• visual impacts
• community engagement

9. Assessment of impacts

A review was undertaken in line with the requirements of the OECD Common Approaches and Equator Principles to identify potential ESHR risks and impacts of the Project and how these would be effectively managed.

The review included:

• desk-based review of project-related documentation by an Independent Environmental and Social Consultant (IESC): environmental and social impact assessment, environmental and social management plans
• IESC and lender site visit to the Project area, including drive along the route and meetings with Project personnel
• follow-up meetings and interviews with relevant Project representatives

The results of this review formed the basis for the evaluation of the Project’s alignment with relevant international standards, and recommendations for future compliance and monitoring.

10. Climate change considerations

UKEF considered the Project’s potential direct (Scope 1 and 2) and indirect (Scope 3) greenhouse gas (GHG) emissions and effects of climate change factors on the Project. The construction and operation of the Project are not considered to be carbon intensive undertakings and estimates for Scope 1 and 2 emissions are reasonably considered to be significantly less than relevant thresholds for quantification and reporting (e.g. 25,000 tonnes CO2 equivalent per annum) set by international standards.

The Project’s largest source of emissions will be from vehicles using the road (i.e. its Scope 3 emissions) and estimates made for the 17km stretch of road also indicate these emissions are considerably lower than 25,000 tonnes CO2 equivalent per annum. The Project is expected to accommodate new traffic associated with economic development brought about by improvement of the road network. It will also accommodate traffic diverted from other roads and traffic associated with population growth.

These additional emissions are considered in line with Ghana’s economic development. The ESHR review revealed that the Project design has considered potential physical impacts of climate change such as floods and extreme temperatures.

11. Decision

Various actions have been agreed between the Project developers, operators, and parties involved in the financing, which are necessary to ensure the Project’s on-going alignment with international standards.

Following agreement of these commitments, it was concluded that the Project should meet the relevant international standards over the Project cycle. UKEF has therefore decided to provide its support in respect of the supply of capital goods and services by UK exporters to the Project.

A condition of support is that the Project will be subject to ESHR monitoring by an IESC, in order to provide satisfaction that the Project is aligned with the relevant international standards throughout the duration of support.

UK Export Finance

August 2021

1. OECD Common Approaches defines “Associated Facilities” as: those facilities that are not a component of the project, but that would not be constructed or expanded if the project did not exist and on whose existence the viability of the project depends; such facilities may be funded, owned, managed, constructed and operated by the buyer and/or project sponsor or separately from the project. ↩