Yerevan Solid Waste Project

Location:

Armenia

Project number:

46172

Business sector:

Municipal and environmental infrastructure

Notice type:

Public

Environmental category:

A

Target board date:

28 Oct 2015

Status:

Signed

PSD disclosed:

31 Jul 2015

Project Description

The EBRD is providing a sovereign loan of up to EUR 8 million to the Republic of Armenia for onlending to the Yerevan landfill management company (the company), a special purpose company wholly owned by the city of Yerevan (the city).

The Bank's loan will be co-financed by a EUR 8 million loan from the European Investment Bank ('EIB') and will be complemented by a capital grant of up to EUR 8 million provided by the EU Neighbourhood Investment Facility ('NIF').

Project Objectives

The proceeds of the loans and grant will be used to finance the construction of an EU compliant landfill in Yerevan, a city of 1.1 million inhabitants.

The investment will be complemented by a TC package comprising implementation support as well as corporate development support to the company. The company will also receive support with the implementation of an Environmental and Social Action Plan as well as a Livelihood Restoration Framework.

Transition Impact

The project's transition impact derives from the following factors:

  • Introduction of a cost-recovery tipping fee and sustainable financing through cost- reflective waste disposal fees for residential and commercial end-users;
  • Establishment of a contractual relationship between the city and the company in order to promote predictability and accountability for the relevant stakeholders;
  • Demonstration of new environmental standards beyond the current local norms by replacing the current use of dumpsites and the promotion of hygienic and EU compliant landfill operations;
  • Introduction of new processes through the installation of gas capturing equipment.

Client Information

ARMENIA

The Republic of Armenia, the company and the City of Yerevan.

EBRD Finance Summary

EUR 8,000,000.00

EUR 8 million sovereign loan to the Republic of Armenia to be co-financed by a EUR 8 million sovereign loan from EIB and a capital grant of EUR 8 million from NIF.

Total Project Cost

EUR 25,440,000.00

The total project cost is EUR 24.00 million including co-financing provided by EIB and NIF.

The project will also benefit from technical cooperation assignments to support corporate development of the company and help with project implementation.

Environmental and Social Summary

The project has been categorised A in accordance with the Bankis 2008 Environmental and Social (iE&Si) Policy (the project was originally considered in 2011 before the 2014 ESP was in place [note: the outcome of the Project under 2008 or 2014 E&S policies would be the same]). An Environmental and Social Impact Assessment (iESIAi) package fit for the purpose of public disclosure was prepared in accordance with the Bank's Performance Requirements (iPRsi), and was disclosed locally and on the Bank's website on 24 June 2015. The approval of the local ESIA prior to the start of construction will be covenanted.

The project will result in significant improvements with regard to the quality of solid waste management services in the City; improvements to public health by reducing the vectors (rats, dogs and insects) that can spread disease; elimination of current underground fires; and reduction in noise and odours. The project will result in the subsequent closure of the current dumpsite maintained by the City, which will result in significant benefits not only for public and worker health and safety, but also for the environment. The existing dumpsite will be closed with surface sealing financed under the proposed project and additional measures to be financed by EIB under a separate arrangement. During the preparation of the National Solid Waste Strategy, waste sorting facilities were considered as an option. Due to affordability constraints, these were not included in the Strategy. Regional sanitary landfills were selected as the most cost-efficient waste management option considering the current conditions in Armenia. Based on this solution, EBRD has been approached for the financing of the construction and operation of an EU compliant landfill in the City and the project has been structured to meet the relevant EU landfill requirements (Directive 1999/31/EC on the landfilling of waste). However, EU requirements related to waste sorting and recycling cannot be applied at the level of the project and this is considered to be outside the influence of the project under consideration. The landfill will have a liner system for protecting soil, surface water and groundwater from leachate and subsequent contamination. The leachate will be collected and recirculated to the landfill. Landfill gas will be collected and flared. To prevent surface water from being polluted, the current leachate stream from the dumpsite will be collected in the leachate reservoir. The contaminated soil of this leachate stream bed will be removed, temporarily stored and finally deposited in the new landfill when operations start.

There are around 160 - 200 people who make their living by sorting out recyclable materials on the existing dumpsite and resell it to buyers. These families live in settlements or scattered houses close to the landfill site under poor conditions. For the active waste pickers, the closure of the existing landfill means a significant loss of livelihood and economic displacement. A Livelihood Restoration Framework (LRF)has been prepared in accordance with EBRD PR5 requirements addressing the economic displacement issues.

Measures to address the potential environment and social impacts and to bring the Company's operations into compliance with the EBRD's PRs have been incorporated into the ESAP. The main issues addressed in the ESAP, among others, cover working conditions at the landfill, occupational health and safety, livelihood restoration, rehabilitation of the landfill site after closure, monitoring, stakeholder engagement and grievance mechanism.

The Company will provide the Bank with annual environmental and social reports, including updates on the implementation of the ESAP. The Bank may also conduct monitoring visits, as required in settlements or scattered houses close to the landfill site under poor conditions. For the active waste pickers, the closure of the existing landfill means a significant loss of livelihood and economic displacement. A Livelihood Restoration Framework (LRF)has been prepared in accordance with EBRD PR5 requirements addressing the economic displacement issues.

Measures to address the potential environment and social impacts and to bring the Company's operations into compliance with the EBRD's PRs have been incorporated into the ESAP. The main issues addressed in the ESAP, among others, cover working conditions at the landfill, occupational health and safety, livelihood restoration, rehabilitation of the landfill site after closure, monitoring, stakeholder engagement and grievance mechanism.

The Company will provide the Bank with annual environmental and social reports, including updates on the implementation of the ESAP. The Bank may also conduct monitoring visits, as required.

There is an Environmental and Social Impact Assessment available for this project.

Technical Cooperation


Pre-Signing

  • TC1: Technical Feasibility Study to assist the Bank with the technical, financial and operational analysis for the proposed Project. EUR 140,000, financed by the Government of Austria.
  • TC2: Environmental and Social Due Diligence to carry out an ESIA, including an environmental and social review of the existing facilities and activities, in accordance with the EBRDis 2008 Environmental and Social Policy. EUR 160,000, financed by the Government of Austria.
  • TC3: Update of Financial Projections to assist the Bank with the financial analysis for the Project.
  • EUR 7,000 financed by the Bankis own resources.

Post-Signing

  • TC4: Project Implementation Unit Support, Engineering Design Services, Procurement and Contract Supervision to include assistance with the prequalification of applicants, preparation of tender documents, evaluation of tenders, contract award and contract supervision. EUR 450,000, financed by the Government of the Czech Republic.
  • TC5: Corporate Development Programme and Stakeholder Participation Programmes (iCDPi) to include assistance with the development and introduction of a PSC, a Financial and Operational Performance Improvement Programme (iFOPIPi) and a Corporate Business Plan. EUR 500,000, proposed to be funded by an international donor or the EBRD Shareholder Special Fund (iSSFi).
  • TC6: Support for Livelihood Restoration Plan and Local ESIA to support the preparation of the LRP and local ESIA and the approval process. EUR 180,000, proposed to be funded by an international donor or the SSF.

Company Contact Information

Nora Martirosyan
nora.martirosyan@yerevan.am
+ 374 10 52 09 73

Business opportunities

For business opportunities or procurement, contact the client company.

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Email: procurement@ebrd.com

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