Puerto Bolívar

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IIC’s Communications Group
E-mail: divulgacionpublica@iadb.org

For project inquiries, including environmental and social questions related to an IDB Invest investment, please contact the client or IDB Invest using the contact information provided above. As a last resort, affected communities have access to the IDB Invest Independent Consultation and Investigation Mechanism.
Tel:+1 (202) 623-3952
Fax: +1 (202) 312-4057
Address: 1300 New York Ave. NW Washington, DC. USA. 20577
E-mail: mecanismo@iadb.org or MICI@iadb.org

Project Number: 
12187-01
Expected Consideration Date by the Board: 
12/11/2018
Date Posted: 
08/13/2018
Company: 
Yilport Terminal Operations S.A.
Financing Requested: 
Up to US$250.000.000
Sector: 
Transport
Environmental and Social Category: 
A
Location: 
Machala
Country: 
Scope Objective: 

The Puerto Bolívar transport project (the "Project") aims to finance the capital expenditure required for the first stage of an investment plan for the modernization, operation and maintenance activities of the Puerto Bolívar Port Terminal, located at the province of El Oro, Ecuador. This investment will expand the port’s capacity to operate containers from 120,000 TEUs to up to 600,000 TEUs per year and will modernize the infrastructure and technology for a more efficient operation. The total estimated cost of the Project is up to US $ 350 million, which will be financed through an A loan from the IDB Group of up to US $ 100 million. The financing plan will be completed with the participation of other commercial banks and / or multilateral organizations and capital contributions by the Project sponsor and 100% Shareholder: “Yilport Holding A.S.” (the “Company”) with a debt-capital ratio of not less than 30/70.

Ecuador is one of the largest banana and shrimp exporters in the world. It is estimated that up to half of the annual export of bananas in Ecuador could be captured by Puerto Bolívar due to its strategic location in the Pacific Ocean. Shrimp is a highly strategic product for the country and for the first time, in 2017 was ranked as the first in terms of value (3,038 M USD for shrimp vs 3,035 M USD for the banana) contribution to the country's exports (among non-petroleum exports). Both products are perishable goods, so the increase in containerization capacity associated with this project will be essential for the improvement of export capacity for the region and the country, especially considering that reefer containers must be positioned empty, as well as with the pre-trip process done in Ecuador.

The Project is part of the privatization process of the existing Puerto Bolívar. Yılport Terminal Operations SA – Ecuador has been granted a concession for 50 years to operate the existing port assets and made some new investments. At the end of the concession period it is expected that all assets will be transferred to the Port Authority. 

The first phase to be financed will take approximately 3 years and is aimed at increasing the port capacity to up to 600.000 TEU per year. The capex plan will include dredging works, which will deepen the draft to -16.50 meters, a new 450-meter long quay and the acquisition of new cargo handling equipment.

Environmental Review: 

The following Environmental and Social information has been provided by the Company:  i) Environmental Impact Assessment study (EIA) corresponding to the “Construction and Operation of the Port Terminal”; ii) EIA for the “Dredging of the Docks, Maneuvering Area and Access Channel of Puerto Bolívar”, both EIAs were prepared under the Company's mandate by the local environmental consultancy 'ECOSFERA'; iii) Environmental License (2018) for the execution of the project: “Construction and Operation of the terminal port of Puerto Bolivar, under code GADPEO-2018-009363-SUIA, granted to YILPORT TERMINAL OPERATIONS (YILPORTECU) S. A. by the Decentralized Autonomous Government (DAG) of El Oro Province; and iv) Environmental License (2017) for the execution of the project: Ex Ante “Dredging of the Docks 1, 2, 3, 4, 5 and 6 Maneuver Zone and Access Channel of Puerto Bolivar”, under code MAE-RA-2017- 297974 granted to YILPORTECU S. A. by the Provincial Department of the Environment of El Oro Province, on behalf of the Ministry of the Environment (MAE).

The  main potential impacts and risks during the implementation and operation phases of the Project include the following: i) Potential impact on mangrove ecosystems (some patches can be found within the area of direct influence of the port); ii) potential contamination of soil and water; iii) Atmospheric emissions, noise, vibrations and dust generation from the construction and operation activities of trucks and heavy machinery; iv) Impacts on the local urban population; v) visual and landscape impacts; vi) Increase in the generation of solid waste and wastewater; vii) Increase of safety risks for the local community due to the traffic of construction vehicles; viii) discharge of wastewater from port facilities; ix) discharges of sewage and ballast from ships; x) Storage and handling of dangerous substances (for example, fuel, lubricants, etc.); xi) Accident and spill risks during land transport activities related to the port; xii) the health and safety risks associated with the operation of heavy machinery; xiii) Cumulative impacts generated by existing port facilities and new future companies in the area of influence; xiv) Potential impacts to marine life from dredging and disposal of dredged material at sea; xv) Atmospheric emissions, noise and dust generation from dredging activities; xvi) Possible re suspension of contaminants due to dredging activities; and xvii) Security risks associated with transportation of cargo for export.

It is worth to point that the Environmental Management Plan (EMP) has the necessary provisions to manage main potential impacts and risks. In addition, the EIAs identifies that the areas of direct influence of the Project does not intersect with protected areas or cultural heritage. According to the available information, no land acquisition is anticipated for Phase 1 and no indigenous community will be affected.

However, these issues will be verified during the Environmental and Social Due Diligence (ESDD). The IDB Invest’s Environmental and Social Sustainability Policy will be activated and at least the following Performance Standards (PS) of the International Financing Corporation (IFC)  will be activated by the project: i) PS 1: Assessment and Management of Environmental and Social Risks and Impacts, ii) PS 2: Labor and Working Conditions, iii) PS 3: Resource Efficiency and Pollution Prevention, iv) PS 4: Community Health, Safety, and Security, and v) PS6: Biodiversity Conservation and Sustainable Management of Living Natural Resources.

The Project has been classified as a Category "A" in accordance with the Environmental and Social Sustainability Policy of BID Invest. The analysis of the information provided so far identified the several gaps with respect to the Sustainability Policy and will be further evaluated during the ESDD:
• E&S Baseline and assessment of Social and Biotical Impacts (Potential impacts to shoreline vegetation, fisheries, bird life, and other sensitive aquatic and near-shore habitats during port construction and operation);
• Community health and safety issues;
• Identification and Analysis of relevant stakeholders;
• Effects and mitigation plans for economic impacts to local communities. 
• Disclosure of Information;
• Informed Stakeholder Consultation and Participation (community leaders, municipality, state and federal agencies and any other relevant third parties);
• Private Sector Responsibilities Under Government-Led Stakeholder Engagement;
• External Communications and Grievance Mechanism;
• Analysis of alternatives;
• Evaluation and management of cumulative impacts;
• Environmental and social management system for Construction and Operation phases (for the Company, contractors, subcontractors and local providers);
• Labor issues and working conditions, including worker’s accommodations, discrimination and gender issues; and
• Grievance mechanism for workers.
Besides focusing on assuring the Project’s compliance with the IDB Invest’s Sustainability Policy, following issues will also be analyzed:
• Evaluation of the permitting process/ licensing and construction status;
• Environmental Monitoring;
• Occupational Health and Safety Monitoring;
• Handling of dredging materials;
• Maintenance Dredging;
• Risk assessment of Occupational Safety and Health;
• Risk assessment of Port Security;
• Risk assessment of natural disasters;
• Solid waste management;
• Hazardous materials and oil management;
• Port Sewage and Storm water;
• Port Marine Safety;
• Visual Impacts; and
• Dust & Noise.
IDB Invest will carry out a complete Environmental and Social Due Diligence (ESDD) that will include the review of documents, site visits and meetings / interviews with key stakeholders. The ESDD will also have the participation of specialized external experts, through an independent environmental and social consulting firm. During the ESDD, the IDB Invest and the consulting firm will evaluate the main risks of the Project, assess the environmental and social management gaps with respect to its E&S Sustainability Policy and propose mitigation measures in the form of an environmental and social action plan (PAAS), and an Environmental Monitoring Report (at least annually during the term of the investment), to be agreed with the client. In addition, an environmental and social executive summary (ESRS) will be prepared and posted on the IDB Invest website after the ESDD is made.

Related files:

Anexo 1.pdf

Anexo 2.pdf

Anexo 3.pdf

Anexo 4.pdf

Anexo 5.pdf

Anexo 6.pdf

Anexo 7.pdf

Anexo 8.pdf

Anexo 9.pdf

Anexo 10.pdf

Anexo 11.pdf

Anexo 12.pdf

Anexo 13.pdf

Anexo 14.pdf

EIA2 Anexo 1.pdf

EIA2 Anexo 2.pdf

EIA2 Anexo 3.pdf

EIA2 Anexo 4.pdf

EIA2 Anexo 5.pdf

EIA2 Anexo 6.pdf

EIA2 Anexo 7.pdf

EIA2 Anexo 8.pdf

Contact Information: 

For inquiries about the Project, contact Alexandra Valverde, Project Administrator; telephone + 593 990801056, email address: alexandra.valverde@yilport.com