ERC Refinery The project consists of the construction of a 5 million ton per annum hydro-cracking and coking facility in Mostorod, Greater Cairo, by the Egyptian Refining Company SAE (ERC or the Company) to upgrade locally available refinery atmospheric residue into lighter products, such as ultra low sulfur Euro V diesel and high octane gasoline blending component, for the domestic Egyptian market (the Project). The Project will also include environmental upgrades to the adjoining facilities of state-owned Cairo Oil Refining Company (CORC) and Petroleum Pipeline Company (PPC). 
Egyptian General Petroleum Company (EGPC), a Government of Egypt (GOE) economic authority, and owner of both CORC and PPC, will supply most of the feedstock to the Project and off-take most of its production. The Project is seen by GOE as an important import substitution project which will address the strong deficit of lighter petroleum products in the Greater Cairo region, which represents about half of the Egyptian refined products market, and Egypts surplus of atmospheric residue/fuel oil. The Project will help optimize the domestic production and distribution of low sulfur refined products, address increasing fuel demand within the country, particularly in the Greater Cairo area, and generate savings for the GOE through the substitution of higher-cost imports. Environmental benefits will also materialize through upgrades of existing facilities and the production of ultra-low sulfur diesel. 

During construction and operation of the refinery the main benefits include:

(i) Employment: Approximately 10,000 jobs created during construction (at peak) and 700 direct permanent jobs during operations in addition to the other services that are expected to flourish around the Project. 

(ii) Benefits to GOE:  In addition to tax revenues, the GOE will benefit through a carried interest in the Project, a price discount on diesel produced by the Project, savings on logistics for imports, and additional revenues for CORC and other state-owned companies for services rendered to ERC.

(iii) Environmental Upgrades and Benefits: ERC has agreed to implement, at its own cost, a series of environmental upgrades to the existing site, CORC and the storage facilities of the adjoining state-owned PPC. The upgrades are expected to lead to significant improvements to local air and water quality as they will involve soil decontamination, installation of low nitrogen oxide burners and of a tertiary waste water system at CORC.

In addition, with the start of ERC operations, CORC will switch to using natural gas exclusively for internal energy needs, away from high sulfur fuel oil.  This is expected to reduce cumulative sulfur dioxide emissions in the area surrounding ERC significantly.

More broadly, potential environmental benefits of the Project will come from the supply to the GOE of ultra low sulfur diesel, which has significantly lower sulfur content than diesel currently produced in Egypt, at lower cost than alternative imports.  This will therefore give GOE a low cost option to reduce the average sulfur content of locally consumed diesel and thereby the level of sulfur dioxide emissions in Egypt. 

(iv) Community Impacts: Community Development Centers will be established to offer a variety of community services, including employment/skills training, literacy, health and other life skills education programs and healthcare support. ERC is expecting to invest over US$5 million in community investment during the construction period.

The key development indicators that are proposed to be monitored during the life of the IFC investment are: 
- Employment (# of jobs during construction and during operations)
- Implementation of environmental upgrades to CORC/PPC and soil remediation (US Dollars spent)
- Reduction in sulfur dioxide emissions in Mostorod area (% decrease from baseline) 
- Payments to GOE (US Dollars)
- National Purchase of Goods and Services (US Dollars)
- Community Development Outlays (US Dollars)