Cholpon-Ata Water sub-project

Location:

Kyrgyz Republic

Project number:

45756

Business sector:

Municipal and environmental infrastructure

Notice type:

Public

Environmental category:

B

Target board date:

03 May 2016

Status:

Signed

PSD disclosed:

15 Feb 2016

Translated version of this PSD: Russian

Project Description

In 2011 the EBRD established a sovereign framework of up to EUR 20 million to co-finance with international donors priority water and wastewater rehabilitation projects across the Kyrgyz Republic.

Under the framework the Bank provides sovereign loans, on-lent or on-granted to participating water companies. The sub-projects address urgently needed water and wastewater infrastructure rehabilitation needs. The original framework is now fully subscribed and the Bank has approved an extension of the facility of EUR 20 million.

Under the extended framework the EBRD is considering supporting the Cholpon-Ata Water Sub-Project.

The EBRD would extend a sovereign loan of up to EUR 1.0 million to the Kyrgyz Republic, to be transferred to Cholpon-Ata City for the benefit of the Cholpon-Ata Water Company for water system
rehabilitation.

The EU Investment Facility for Central Asia (IFCA) will provide a grant in the amount of EUR 3.1 million to co-finance implementation of the sub-project. Additional co-financing in the amount of EUR 1.0 million is expected from an IFI.

Project Objectives

The overall objectives of this sub-project are to: (a) rehabilitate the water supply system; and (b) improve financial and operational management.

Transition Impact

Transition Impact of the sub-project would be:
• Improved access to basic public utilities;
• Introduction of tariff reform within affordability limits;
• Higher collection rates;
• Establishment of a contractual arrangement between the city and the company;
• Improvement of operational and financial management of the Cholpon-Ata Water Company (including preparation and publication of IFRS and a business plan, training on procurement, etc.); and
• Introduction of a formal consultation process with water users in form of a community-based stakeholder participation programme.

Client Information

KYRGYZ REPUBLIC
Government of the Kyrgyz Republic, Cholpon-Ata City and the Cholpon-Ata Water Company.

EBRD Finance Summary

EUR 1,000,000.00
Sovereign loan of up to EUR 1.0 million to the Kyrgyz Republic transferred to Cholpon-Ata City for the benefit of the Cholpon-Ata Water Company.

Total Project Cost

EUR 5,100,000.00

The total sub-project cost is EUR 6.5 million including technical cooperation.

Environmental and Social Summary

The Project is categorised B. The Environmental and Social (E&S) due diligence for the proposed Priority Investment Programme (PIP) has been carried out by independent consultants.

The implementation of the PIP will increase access to tap water from the current 91 per cent to 94 per cent. The reliability of the water supply services will be significantly improved and water losses will be considerably reduced. Replacement of the old water pipes and the new leak detection equipment will help to mitigate the potential risks of cross contamination, leading to potential health risks to the end users. To solve some existingwater quality problems, the PIP proposes a new abstraction point upstream of the main pollution sources and a more appropriate and effective treatment system. Potential risk of contamination from leaking electricity transformers will be mitigated by replacing them with new electric transformers. Provision of basic laboratory equipment and facilities will enable better control of the water quality. The outbreaks of water borne diseases will be significantly reduced by improved and better controlled water quality and improved sanitation.

Currently, only 33 per cent of the population is served by a piped sewerage network while the majority disposes of their wastewater into open drains, septic tanks, gardens/yards, onto the streets etc. The rehabilitation of the existing wastewater treatment plant (WWTP) is part of the ADB supported Issyk-Kul Sustainable Development Project (ISDP) and hence is not covered under the PIP.
Given the limited financial resources and affordability constraints the Company will not be able to achieve EU standards in medium to long-term and, therefore, the project requires derogation from the 2008 Environmental and Social Policy (ESP). The Board approved a "blanket" derogation from the ESP to all sub-projects under the Framework on 12 May 2011.
The human health implications of the shortfalls from EU standards are assessed to be minor compared to the benefits of the PIP implementation resulting in more reliable water supply to the local population. To minimise the associated health risks to the local communities, awareness raising programmes will be developed as part of mitigation plans and implemented to prevent risks of water
borne diseases.
The results of due diligence investigations has shown that the capacity of the Water Company to manage E&S issues is low and their E&S management systems, occupational health and safety and stakeholder engagement practices require further upgrading and improvement to meet EBRD's Performance Requirements (PRs). To address affordability concerns, a Social Support Programme will be developed for the low income customers for the sustainability of their payments.
The Environmental and Social Action Plan (ESAP) commits the Company amongst others developing an environmental, health and safety (EHS) management system, E&S trainings, acquiring necessary permits, development of HR policies, provision of basic laboratory facilities for improvement of water monitoring, establishment of sanitary protection zones at the boreholes and removal of pollution sources, monitoring of affordability for low-income groups, management and monitoring of contractors, asbestos handling and disposal, archaeological chance find procedures, and improving human resources practices. A Stakeholder Engagement Plan has also been developed for the Water Company.
The Company's environmental and social performance and implementation of the ESAP will be monitored through annual E&S reports and site visits, when deemed necessary.

Technical Cooperation

Pre Loan Signing:
TC 1: Feasibility Study for the Cholpon-Ata Water Sub-project. Preparation of a financial, technical, environmental and social feasibility study. The cost of this assignment is EUR 280,000, financed by
the EBRD Shareholder Special Fund.
TC 2: Audit and restatement of the financial accounts. The cost of this assignment is EUR 12,255, financed by the Bank's own resources.
Post Loan Signing:
TC 3: Project Implementation Support to the Company to: (i) assist the PIU with engineering design, procurement and contracts supervision. The estimated cost of this assignment is EUR 700,000, proposed to be financed by the Early Transition Countries (the "ETC") Fund.
TC 4: Corporate Development Programme and Stakeholder Participation Programme. The estimated cost of this assignment is EUR 400,000 proposed to be financed by the ETC Fund.

Company Contact Information

Makhmud Turdakunov, Director
m.turdakunov@mail.ru
+996 3943 42479; 42677


Municipal Enterprise #Vodokanal# of Cholpon-Ata City Sovetskaya str., Cholpon-Ata, Kyrgyz
Republic

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)

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Text of the PIP

Project Complaint Mechanism (PCM)

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Please visit the Project Complaint Mechanism page to find information about how to submit a complaint. The PCM Officer (pcm@ebrd.com) is available to answer any questions you may have regarding the submission of a complaint and criteria for registration and eligibility, in accordance with the PCM Rules of Procedure.