2 Elmreisa Free Zone Prefeasibility Study Report

Mott MacDonald | Elmreisa Free Zone A.5 Industrial – petrochemical cluster A.5.1 Alignment with Free Zone objectives Free Zone - Objectives Industrial, Petrochemical Cluster - Objectives Objective 1: Attract local and foreign investment Objective 2: Facilitate a shift towards a knowledge based economy Objective 3: Create links with the local economy Objective 4: Create opportunities for diversification of the Libyan economy Objective 5: Enhance Libya’s manufacturing and export/transit-trade industries Objective 6: Encourage regeneration of the local economy Objective 7: Contribute to Objective 1: Strengthen Libya’s position as a leading North African oil producer Objective 2: Facilitate expansion of the secondary oil products industry in Libya Objective 3: Increase employment opportunities in the oil industry Objective 4: Maintain close synergies with existing oil activities in Benghazi Table Key Directly contributing towards the Free Zone Objectives Indirectly contributing towards the Free Zone Objectives A.5.2 Target business sectors of cluster Target Business Sectors Oil and gas business services Oil and gas storage and distribution Oil and gas exploration and production Other oil and gas processing based industries such as: Fabrication related to the oil and gas industry detergents, fertilisers, paints, plastics, synthetic fibres, Oil and gas services such as Oilfield services, geophysical rubber, and medicine services, environmental and safety related services 339483 | 15 December 2016 92

Mott MacDonald | Elmreisa Free Zone A.6 Media cluster A.6.1 Alignment with Free Zone objectives Free Zone - Objectives Objective 1: Attract local and foreign investment Objective 2: Facilitate a shift towards a knowledge based economy Objective 3: Create links with the local economy Objective 4: Create opportunities for diversification of the Libyan economy Objective 5: Enhance Libya’s manufacturing and export/transit-trade industries Objective 6: Encourage regeneration of the local economy Objective 7: Contribute Objective 1: Attract international media Media Cluster - Objectives Objective 2: Facilitate agencies to set up a regional hub the successful development of media start-up companies Objective 3: Become a host of worldwide and regional media events/conferences Objective 4: Generate quality employment opportunities for the local community Table Key Directly contributing towards the Free Zone Objectives Indirectly contributing towards the Free Zone Objectives A.6.2 Target business sectors of cluster Target Business Sectors Advertising and Communication Leisure and Entertainment; Media and Marketing Services Broadcasting Media Support Services Film Event Management and Event Support Services Information Agencies Publishing and Printing Media and Marketing Services Music 339483 | 15 December 2016 93

Mott MacDonald | Elmreisa Free Zone A.7 Port, trading and transhipment cluster A.7.1 Alignment with Free Zone objectives Free Zone - Objectives Port, trading and transhipment Cluster - Objectives Objective 1: Attract local and foreign investment Objective 2: Facilitate a shift towards a knowledge based economy Objective 3: Create links with the local economy Objective 4: Create opportunities for diversification of the Libyan economy Objective 5: Enhance Libya’s manufacturing and export/transit-trade industries Objective 6: Encourage regeneration of the local economy Objective 7: Contribute Objective 1: Become a key regional distribution hub Objective 2: Facilitate the development of the regional shipping industry Objective 3: Enable international trade activities in the Free Zone Objective 4: Generate quality employment opportunities for the local community Table Key Directly contributing towards the Free Zone Objectives Indirectly contributing towards the Free Zone Objectives A.7.2 Target business sectors Target Business Sectors Imports / exports Inspection services Logistics and Freight Services Chartering Transportation and distribution services Warehousing and Container terminals Trade consulting and customs brokerage Other business services 339483 | 15 December 2016 94

Mott MacDonald | Elmreisa Free Zone A.8 Technology cluster A.8.1 Alignment with Free Zone objectives Free Zone - Objectives Objective 1: Attract local and foreign investment Objective 2: Facilitate a shift towards a knowledge based economy Objective 3: Create links with the local economy Objective 4: Create opportunities for diversification of the Libyan economy Objective 5: Enhance Libya’s manufacturing and export/transit-trade industries Objective 6: Encourage regeneration of the local economy Objective 7: C Technology Cluster - Objectives recognised Objective 1:Build up branches of international research institutes Objective 2: Stimulate the Research and Development sector in Libya Objective 3: Facilitate interaction between academia and industry Objective 4: Provide a technology test-bed for the introduction of new technologies in Libya Table Key Directly contributing towards the Free Zone Objectives Indirectly contributing towards the Free Zone Objectives A.8.2 Target business sectors of cluster Target Business Sectors University collaboration Nanotechnology Research and development Aerospace Telecommunications Automotive Computer science Artificial Intelligence Information technology Photonics Renewable technologies Robotics Semiconductors Biotechnology 339483 | 15 December 2016 95

Mott MacDonald | Elmreisa Free Zone 96 B. Indicative programme 339483 | 15 December 2016

Mott MacDonald | Elmreisa Free Zone 97 C. Programme risk register The programme risk register below is a preliminary representation of programme level risks identified during the preparation of the pre-feasibility report. It is recommended that the register is further developed and refined as the programme progresses. The key risks should be identified and allocated to individuals to monitor. Detailed mitigation plans for each risk should be developed. Risk Stage Gross Risk Risk Management Post mitigation Gross Risk Ref Risk Risk Type Probability Impact Status Strategy Mitigation actions Status Planning Implementation Operation Probability Impact Develop flexiable working programmes, identify elements that can be progressed during civil unrest.    Possible Significant High Accept Possible Significant High Programme delays due to civil unrest in Enhance security and develop ways of increasing 001 Libya Strategic stakeholder confidence Inability to acquire remaining land needed for the Free Zone, has an impact on the  Possible Major High Mitigate Remote Major High development and implementation of all Identification and early engagement with remaining 002 clusters Strategic land owners Strategic vision and objectives  Possible Significant High Mitigate Unlikely Significant Medium 003 inappropriate Strategic Consultation with stakeholders. Ineffective investment incentives, inability to attract businesses to invest in the  Possible Major High Mitigate Ongoing market research and phased development to Unlikely Major Medium 004 Free Zone Strategic respond to the evolving market demand Analyse previous Free Zone examples to develop a  Possible Moderate Medium Mitigate robust employment policy and a detailed plan of how Unlikely Moderate Medium 005 Harsh employment conditions Strategic the policies will be enforced Dissatisfaction of tenants due to local Carry out a market assessment to determine the level quality of services during operation  Probable Moderate Medium Mitigate of local FM providers and development of international Remote Moderate Medium 006 associated with local FM experience Commercial supply chain strategy as necessary Carry out a market assessment to determine the Increased cost to the programme due to  Probable Moderate Medium Mitigate capacity of the local construction market and Remote Moderate Medium the limited availability of construction development of international supply chain strategy as 007 materials and equipment locally Commercial necessary Carry out a market assessment to determine the Programme delay due to a lack of  Probable Moderate Medium Mitigate capacity of the local construction market and Remote Minor Low capacity of local construction development of international supply chain strategy as 008 organisations Commercial necessary Viability of the new off-shore commercial  Possible Major High Mitigate Carry out an assessment to determine the feasibility Possible Major High 009 port Technical for a port development Misalignment with off-site infrastructure,   Possible Major High Mitigate Early engagement with railway line project team to Possible Major High reducing the opportunity to maximise confirm the proposed location of the railway line and/or 010 connectivity and additional benefits. Technical discuss alternative routes if necessary Carry out flood risk assessment and implement    Possible Significant High Mitigate Unlikely Moderate Medium 011 Environmental risk - site flooding Technical associated recommendations Carry out a geotechnical survey to determine the   Probable Moderate Medium Mitigate Probable Moderate Medium 012 Cost increase due to soil conditions Technical impact and develop a mitigation plan Inadequate offsite transport infrastructure   Probable Moderate Medium Mitigate Carry out a transport assessment survey to establish Probable Moderate Medium 013 to support the development Technical the infrastructure gap Analyse previous Free Zone examples to develop a   Probable Moderate Medium Mitigate robust environmental policy and a detailed plan of how Unlikely Moderate Medium 014 Negative environmental impact Technical the policies will be enforced Existing airport capacity restraint if not Early engagement with the Benina airport authority to 015 expanded Technical  Probable Moderate Medium Mitigate disscuss possible extension plans Probable Moderate Medium Liaise with local utility suppliers to establish the Inadequate utility supplies (power, water,   Probable Significant High Mitigate availability of capacity to support the development and Unlikely Minor Low 016 sewage, telecommunications) Technical develop onsite measures as necessary Limited access during construction causes delay due to the residential  Remote Minor Low Mitigate Early engagement with the residential development Unlikely Negligible Low development opposite the site team to determine their timetable and early 017 progressing concurrently Technical consideration of alternative access routes to the site 339483 | 15 December 2016

Mott MacDonald | Elmreisa Free Zone 339483 | 15 December 2016