Belarus Water Sector Framework Extension

Country:

Belarus

Project number:

49176

Business sector:

Municipal and environmental infrastructure

Notice type:

Public

Target board date:

20 Sep 2017

Status:

Passed Final Review, Pending Board Approval

PSD disclosed:

21 Apr 2017

Translated version of this PSD: Russian

Project Description

The Belarus Water Sector Framework, EUR 40 million debt facility for water and wastewater investments approved by the Bank in 2015, is now fully subscribed. The proposed project is an extension of the existing framework consisting of sovereign debt facilities for an aggregate amount of up to EUR 60 million to be provided for water utilities in cities throughout Belarus.

Project Objectives

The Bank's sub-project loans under the extended framework will facilitate critical water and wastewater management improvements in the participating cities, including modernisation of water/wastewater treatment facilities, rehabilitation of the networks, modernisation of pumping stations and purchase of maintenance equipment.

Transition Impact

Good.

The transition impact objective of the extended framework will be: (i) tariff increases; (ii) improvements in operational efficiency; (iii) promotion of transition to a green economy through the support for pollution prevention and reducing the degradation of ecosystems; and (iv) the introduction of improved corporate governance and transparency.

Client Information

Republic of Belarus

EBRD Finance Summary

EUR 60,000,000.00

The EBRD loans under the extended framework would be provided to the Republic of Belarus and on-lent to participating water companies or to participating water companies under a sovereign guarantee.

The extended framework would be co-financed with EUR 15 million capital grants by international donors. The cost of each sub-project will be determined respectively.

Total Project Cost

EUR 60,000,000.00

Environmental and Social Summary

The extended framework is not categorised; however, each sub-project under the extended framework will be categorised at CRM stage and will undergo separate Environmental and Social Due Diligence ("ESDD"). The extended framework will include municipal sub-projects that will finance water supply and wastewater treatment improvements in selected cities across Belarus.

Sub-projects will typically involve rehabilitation and modernisation of existing water and wastewater infrastructure and are expected to be categorised "B" and structured to meet the EBRD Performance Requirements. However, any sub-projects categorised "A" under the Bank's Environmental and Social Policy ("ESP") or requiring derogation to the ESP will be submitted to the Board for approval regardless of the size of the loan.

ESDD for each sub-project will be carried out by independent consultants as part of the Feasibility Study and will include at a minimum an assessment of potential E&S impacts and benefits, and an E&S audit of the management systems, operations and facilities of each participating city to help structure the priority investment programmes. The ESDD will also need to ascertain whether the proposed investments achieve drinking water quality and wastewater discharges that comply with local and the EU standards, and every effort will be made to achieve the highest standards possible within the borrowing capacity of the utilities and affordability limits for the population. Sub-project specific Environmental and Social Action Plans will be developed to structure the sub-projects to meet national regulations and the EBRD Performance Requirements, including the EU environmental standards; however, sub-projects in the Baltic Sea catchment area will be structured to comply with the recommendations of the Baltic Marine Environment Protection Commission ("HELCOM"), which are more stringent than Belarusian or EU requirements on some effluent discharge parameters.

Technical Cooperation

Pre-Signing

TC 1: Feasibility Studies to include:

(i) a technical review of the proposed operations to improve the water and wastewater services in the Participating City, demand, revenue and operational cost projections; (ii) preparation of technical and functional specifications of the project components;

(iii) financial and economic analysis of the proposed investments, including cost estimates and the preparation of the financial model; and (iv) environmental and social assessment in line with EBRD's 2014 Environmental and Social ("E&S") Policy and Performance Requirements; and a legal due diligence on the envisaged project structure. The estimated total cost of this TC support is up to EUR 2.1 million for up to 7 sub-projects, proposed to be financed by international donors or the Bank's Shareholder Special Fund ("SSF").

TC 2: Audit and restatement of the Participating Companies' accounts in accordance with IFRS.

The estimated total cost of this TC support is up to EUR 210,000 for up to 7 sub-projects, to be financed by the Bank's own resources.

Post-Signing

TC 3: Project Implementation Support.

The TC will support the PIU with procurement, preparation and evaluation of tenders, contract award and administration, financial control, project management and reporting including assistance to each company in implementation of Environmental and Social Action Plan ("ESAP") and preparation of annual E&S reporting. The estimated total cost of this TC support is up to EUR 5.6 million for up to 7 sub-projects, proposed to be financed by international donors or the SSF.

TC 4: Corporate Development and Social Support Programme.

The TC will: (i) support institutional development in the form of operational improvements and financial improvements in the form of a Financial and Operational Performance Improvement Programme ("FOPIP") and implementation of a Management Information System ("MIS"), as well as introduction of a PSC and

(ii) implement a Social Support Programme. The estimated total cost of this TC support is up to EUR 2.8 million for up to 7 sub-projects, proposed to be financed by international donors or the SSF.

Business opportunities

For business opportunities or procurement, contact the client company.

For state-sector projects, visit EBRD Procurement: Tel: +44 20 7338 6794
Email: procurement@ebrd.com

General enquiries

EBRD project enquiries not related to procurement:
Tel: +44 20 7338 7168
Email: projectenquiries@ebrd.com

Public Information Policy (PIP)

The PIP sets out how the EBRD discloses information and consults with its stakeholders so as to promote better awareness and understanding of its strategies, policies and operations.
Text of the PIP

Project Complaint Mechanism (PCM)

The EBRD has established the Project Complaint Mechanism (PCM) to provide an opportunity for an independent review of complaints from one or more individuals or from organisations concerning projects financed by the Bank which are alleged to have caused, or likely to cause, harm.

Project Complaint Mechanism

Any complaint under the PCM must be filed in accordance with the timeframes prescribed in the PCM Rules of Procedure. You may contact the PCM Officer (at pcm@ebrd.com) for assistance if you are uncertain as to the eligibility of your complaint.