Puhovichi Solid Waste Project

Location:

Belarus

Project number:

46960

Business sector:

Municipal and environmental infrastructure

Notice type:

Public

Environmental category:

B

Target board date:

05 Jul 2017

Status:

Board Approved

PSD disclosed:

27 Mar 2017

Translated vesion of this PSD: Russian

Project Description

A € 5 million sovereign loan to the Republic of Belarus for the construction of the first EU regulations compliant regional landfill in the country and related infrastructure.

The new landfill will be located in Druzhnyi, a village located some 45 km outside the city of Minsk, and will service Puhovichi and Cherven Districts, both within the Minsk region. The EBRD loan will be on-lent to a new regional solid waste company that will be established to operate the new landfill as well as waste collection systems for the two above mentioned districts.

It is envisaged that the project will be co-financed by a capital grant of € 2 million provided by an international donor(s).

Project Objectives

The proceeds of the loan and the grant will be used to finance the upgrade of a solid waste management system in the Puhovichi and Cherven Districts through i) the construction of an EU regulations compliant landfill, ii) a waste sorting facility, and iii) vehicles and equipment for improvement of the waste collection system.

The key benefits of the Project are better service and environmental standards due to: (i) reduced landfilling, (ii) reliable waste collection and transportation operations, (iii) lower CO2 and methane emissions.

In addition, the investment will be complemented by a TC package comprising implementation support as well as corporate development support to the new company.

Transition Impact

Good.

Demonstration effects

  • Demonstration effects by introduction of new environmental standards beyond the current local norms by promoting higher standards of physical technology in the sector, increasing recycling and decreasing the amount of waste deposited at the landfill.
     
  • Commercialisation through theestablishment of the first special purpose regional solid waste management company. If successful, this would be the first commercially oriented solid waste company in Belarus, with significant demonstration effects to other Districts and Regions, creating a blueprint for unbundling of municipal utilities and solid waste sector reform in Belarus.
     
  • Improved standards for corporate governance and business conduct through increased transparency requirements, such as financial management (including accounting and reporting to be produced in accordance with IFRS); international tendering for the contracts; implementation of annual environmental, social, health and safety reports.
     
  • Framework for markets through further development of tariff methodology to cover operating costs, depreciation, debt service and capital expenditure, while ensuring affordability for low income families

Client Information

REPUBLIC OF BELARUS

A sovereign loan to the Republic of Belarus, to be on-lent to a regional solid waste management company that will be established by the Minsk Region.

EBRD Finance Summary

€ 5,000,000.00

A sovereign loan of to the Republic of Belarus

Total Project Cost

€ 7,000,000.00

EBRD will seek to co-finance the Project with an investment grant from an international donor.

Environmental and Social Summary

The Project has been categorised B in accordance with the 2014 EBRD Environmental and Social Policy (ESP). The Environmental and Social Due Diligence (“ESDD”) has confirmed that the potential adverse future E&S impacts arising from the implementation of the Project are site-specific, readily identifiable and can be addressed through adequate mitigation measures.

The Project will bring significant environmental and social (“E&S”) benefits to Puhovichi and Cherven Districts and surrounding communities through the provision of a regional landfill designed to EU standards at the Druzhnyi site; the construction of a new waste sorting facility; and the purchase of vehicles and equipment to improve the waste collection system. The Project will rehabilitate waste collection, transportation, waste sorting, recycling and disposal services, and increase operational efficiency as well as improve environment and hygiene standards.  However, policy dialogue on a comprehensive waste management approach at the regional level to pursue sector reforms and significant further investments, as described below, will be needed to achieve full compliance with EU Waste Framework Directive requirements in this area. On that basis, a derogation from the ESP is sought.

The ESDD for the project included an E&S audit of the existing two municipal waste management Companies’ current operations, facilities and E&S management capabilities; an analysis of the potential E&S issues associated with the proposed Priority Investment Programme; a hydrogeological risk assessment; and a waste picker analysis.

The due diligence investigations showed that the existing municipal Companies in Puhovichi and Cherven Districts have weak Environmental Health and Safety, and Social (“EHSS”) management capabilities, underdeveloped EHSS management systems, and poor operational practices which require improvement to meet EBRD's Performance Requirements (“PR”s).  Since a new special purpose regional solid waste management company will be set up for the project, it will be necessary to ensure adequate capacity on E&S matters for project implementation in line with EBRD PRs which will be supported by several donor-funded post-signing assignments.  The Project will be closely monitored by EBRD.

The ESDD has identified that there are no E&S sensitivities in the vicinity of the project's proposed location. The new site is adjacent to the existing dumpsite and in the vicinity of the industrial facilities, a thermal power plant and some state-owned agricultural land, with no residential properties in close proximity within a sanitary protection zone for a landfill. The site has been already disturbed by construction activities and traffic. The nearest community to the landfill site is the village Nizovka, located 2 km away from the proposed landfill site. The required sanitary protection zone of 500 m is observed. Only limited adjacent state-owned agricultural land acquisition of 1.8 ha will be required for the Project, and it is not associated with any resettlement or displacement. Closure of the four existing non-compliant dumpsites in Puhovichi and Cherven Districts will be a condition of the EBRD investment.

As per the existing situation in Puhovichi region, the hazardous waste from the households cannot be separately collected; a small quantity of hazardous waste (approximately 2 per cent), including some construction waste, will mix in the municipal solid waste and will be disposed of in the landfill. Considering the location of the landfill, robust design and the operational measures that will be put in place, the mixing of this small quantity is not expected to result in any significant risk for environment or human health. It is estimated that an additional investment of between EUR 15-30 million would be required to arrange an EU-compliant system of safe collection, storage and disposal of hazardous waste in the project region, supplemented with an adequate awareness raising and educational campaign for both residential and industrial stakeholders.

Hydrogeological assessment of the site confirmed that groundwater levels are high at the site and overall throughout Puhovichi region. There is however a low-permeability barrier confining a deeper aquifer which is used predominantly for groundwater abstraction purposes. Puhovichi region residents also use own private dug wells for water abstraction, but these wells are not down-gradient from the landfill site. After 12 years of operation of the existing landfill cell at Druzhnyi site, the groundwater quality at this community shows that the measured parameters are within the acceptable limits of Belarusian and WHO standards. Increased concentrations of some heavy metals (e.g. iron or cadmium) are most likely to reflect common and naturally occurring level of these metals in the environment.

The design measures including the EU compliant landfill base/bottom sealing, rupture and leak detection and monitoring system and the drainage system will prevent any soil, surface or groundwater contamination from any accidental leachate spill or water from entering the landfill body. Excess leachate will be treated by the reverse osmosis system on site. Groundwater monitoring system will be carried out during the lifespan of the landfill and after its closure.

A small number of waste pickers (up to around 13-18 people) have been identified as working at the existing landfills/dumpsites, and the ESDD has concluded that working conditions of waste pickers at the dumpsites pose a health and safety risk. A draft Livelihood Restoration Plan (“LRP”) has been developed during ESDD to provide a baseline and identify alternative livelihood options for the waste pickers. Finalising the development and adoption of LRP by the Company will be included among actions in the ESAP and supported through post-signing TCs, and implementation of the LRP will have to be closely monitored. A Stakeholder Engagement Plan (“SEP”) and a Non-Technical Summary have also been prepared for the project.

A corrective Environmental and Social Action Plan (“ESAP”) has been prepared to address the necessary mitigation measures and improvements and will be implemented by the Client during the Project. The ESAP requires, among other measures, the development of the local EIA (OVOS) including public consultation and disclosure at the detailed design stage according to the national requirements; obtaining all necessary environmental and construction permits; development and implementation of  a comprehensive Environmental and Social Management Plan specifically focused to construction activities, development of an Health and Social management system to include company policy, requirements for risk assessments, development of the existing landfills/dumpsites closure plan and hazardous waste management plan; preventative measures including Personal Protection Equipment, training, regular inspection, documentation and reporting, emergency prevention, preparedness and response; traffic management and community safety; development and implementation of public awareness campaigns among local communities disseminating information on efficient waste management practices, finalising and implementing LRP, and implementation of the SEP, inclusive of the grievance mechanism.

E&S considerations and requirements to start a policy dialogue on waste segregation and recycling and hazardous waste management will need to be incorporated into the associated post-signing TCs including project implementation support and Corporate Development Programme (CDP) to assist the new Company in building their EHSS management capacity, provide support in the implementation of the ESAP, SEP, LRP and preparation of the annual E&S reporting to the Bank. The Project will be closely monitored by the Bank through overseeing the work of PIU and CDP consultants, annual E&S reports, monitoring visits and independent implementation audits when deemed necessary.

Technical Cooperation

1. Supplementary technical, environmental and social due diligence study to review the available site location options and to meet the Bank's specific project preparation and due diligence requirements at the existing Druzhnyi landfill site including technical, financial environmental and social aspects. € 200,000 financed by the Czech Republic and € 60,000 financed by the Banks' own resources.

2. Audit of financial statements. € 9,300 financed by the Bank's own resources.

3. Project Implementation Support. The TC will support the Project Implementation Unit with procurement, preparation and evaluation of tenders, contract award and administration, financial control, project management and reporting. € 600,000, proposed to be financed by a bilateral or multilateral donor orthe Bank's Shareholder Special Fund (SSF).

4. Corporate Development and Stakeholder Participation Programme (CDSPP). The TC will (i) support in the establishment of the Company, ii) support the institutional development of the Company to implement efficient business planning and operations in accordance with Belarusian and EU directives on solid waste (iii) implement a Stakeholder Participation Programme, aimed at enhancing public ownership by encouraging increasing public participation in the provision of solid waste services (service quality, rehabilitation activities, tariffs integrating poverty and social issues) and raising public awareness on issues related to the project implementation. € 500,000, proposed to be financed by a bilateral or multilateral donor or the Bank's Shareholder Special Fund (SSF).

Business opportunities

For business opportunities or procurement, contact the client company.

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Email: procurement@ebrd.com

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