Category A project supported: Bolgantanga Road, Ghana

1. Project description

UK Export Finance has agreed to provide support to the Ghana Ministry of Finance with respect to the supply of goods and services by QGMI Construction UK Ltd (QGMI) to the Ministry of Roads and Highways for the construction, rehabilitation and operation of 109 km of the Bolgatanga-Bawku-Pulmakom road (the project).

One of the main objectives of the project is to improve the condition of the roads in the Northern Corridor of Ghana. The rehabilitation of the road is designed to increase road safety, trade and boost economic and social development, and to further integrate the Upper Eastern and Northern regions of Ghana; potentially also benefiting neighboring countries.

The project includes:

  • Rehabilitation/construction of parts of Bolgatanga-Bawku-Pulmakom road which were not built before

  • Paving of the road with surface dressing, except for the first 2 km of the road in Bolgatanga which will be coated with asphalt layers

  • Construction of two lanes on the first 2 kilometers of the road in Bolgatanga to convert the road into a dual carriageway

  • Construction of a 15.7 km bypass in Bawku

  • Construction of three new bridges at the locations of the existing bridges at Zuarungu, Tilli and Zebilla. The new bridges should be located parallel to the existing bridges, with revised alignments of the accesses to the new bridges.

2. Project sector

The project is in the transport sector.

The Project is developed by the Ministry of Roads and Highways.

4. UK exporters

QGMI Construction UK Ltd

5. Export Credit Officer Bank

HSBC

6. Amount of UK export finance support

The principal value of the aid is approximately $30.5 million.

seven. OECD Common Approaches and Equator Principles

UK Export Finance has classified the project as Category A, i.e. having potentially significant environmental, social and human rights (ESHR) as defined in the OECD Common Approaches to Officially Supported Export Credits and Environmental and Social Due Diligence of 2012 (revised 2016) (the “OECD Common Approaches” ) and the Equator Principles (2020).

As required by the OECD Common Approaches, UK Export Finance has disclosed its possible involvement in the project. A notification was posted on the UK Export Finance website on April 21, 2021, which directed interested parties to the contact hence the post ESHR information can be sourced. UK Export Finance received no comments from interested parties.

Ramboll was commissioned by QGMI to undertake an independent environmental and social due diligence study on behalf of the Lender Group.

8. Environmental, social and human rights standards

Project related ESHR documentation was reviewed for alignment with the 2012 International Finance Corporation (IFC) Performance standards (PS) on environmental and social sustainability and the World Bank Group on environment, health and safety (EHS) Guidelines.

If applicable IFC PS were:

  • PS1: Assessment and Management of Environmental and Social Risks and Impacts

  • PS2: Work and working conditions

  • PS3: Resource Efficiency and Pollution Prevention

  • PS4: Community Health, Safety and Security

  • PS5: Land Acquisition and Involuntary Resettlement

  • PS6: Conservation of Biodiversity and Sustainable Management of Living Natural Resources

  • PS8: Cultural Heritage.

The relevant World Bank Group EHS The guidelines were:

  • General EHS Guidelines (2007)

  • EHS Guidelines for the extraction of building materials

  • EHS Guidelines for toll roads.

9. Kind of ESHR impacts

The examination of the potential ESHR risks and impacts considered the following impacts, receptors and issues during the construction and operation phases of the project:

  • worker and community health and safety

  • physical and economic displacement

  • emissions to the atmosphere (including land, air and water, and climate change)

  • traffic management and road safety

  • Wastewater

  • waste and hazardous materials management

  • emergency planning and response

  • grievance mechanisms

  • community engagement.

ten. Evaluation of ESHR impacts

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

A review of project documentation by an independent environmental and social consultant (IESC), Ramboll, was also undertaken.

The review included:

  • a visit to the site by the IESC

  • desk review of project documentation including (but not limited to): environmental and social impact assessment, environmental and social management plans and stakeholder engagement plan, resettlement action plan , climate change risk assessment, biodiversity management plans

  • follow-up meetings and interviews with relevant project representatives.

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

Based on the review, the project was found to be likely to cause a number of adverse environmental and social impacts both during construction and operation. However, a suite of controls offered as part of the project’s environmental and social management systems should facilitate the management of these impacts.

11. Climate Change Considerations

UKEF has taken into account the direct and indirect greenhouse gas potential (GHG) the project’s emissions and the effects of climate change factors on the project as part of its ESHR exam.

A climate change risk assessment, including consideration of physical risks and quantification of scope 1, 2 and 3 emissions during construction and operation of the project, has been undertaken. The assessment included the identification of relevant climate change trends, their potential impacts, and existing design and mitigation measures.

The total estimated annual emissions from the construction phase of scopes 1, 2 and 3 is equal to 15,990 tCO2e per year. As it is below 25,000 tCO2e per year IFC reporting threshold, these are not considered material.

During operation, sources of emissions will include maintenance activities (Scope 1), use of grid electricity from planned lighting (Scope 2), and emissions associated with future use of road and embodied carbon in operational maintenance materials (Scope 3). Overall, the estimated operational emissions for the Bolgatanga road for year 20 due to traffic are expected to be 362.4 tCO2e per year, which is significantly lower than the 25,000 tCO2e per year. IFC reporting threshold.

The review revealed that the project design took into account the potential physical impacts of climate change, such as changes in rainfall and weather patterns.

12. Decision

Various actions have been agreed between the project promoter, the operator and the parties involved in the financing, which are necessary to ensure the continued alignment of the project with international standards. Following agreement on these commitments, it was concluded that the project should adhere to relevant international standards throughout the project cycle. UKEF has therefore decided to support the supply of goods and services by UK exporters to the project.

A condition of the support is that the project will be subject to monitoring and reporting to ensure that the project is aligned with relevant international standards throughout the duration of the support.

UK export finance

March 25, 2022