Ungeni Chisinau Natural Gas Pipeline

Location:

Moldova

Project number:

48769

Business sector:

Natural resources

Notice type:

Public

Environmental category:

A

Target board date:

30 Nov 2016

Status:

Disbursing

PSD disclosed:

27 Sep 2016

Translated version of this PSD: Romanian

Project Description

The EBRD is requested by the government of Moldova to finance a project which aims at enhancing the security of the gas supply to Moldova. The project consists of the construction of a new natural gas trunk pipeline, which will bring gas to Moldova's capital, Chisinau, from Romania. The new 120 km pipeline will have a diameter of 600 mm with a capacity of 1.5 bcm per annum and connect the existing gas infrastructure networks in Ungheni (Moldova) and Iasi (Romania). The EBRD is working with several partners in the preparation of the project, including with the EU, the Energy Community, the EIB and Swedish International Development Cooperation Agency (SIDA) among others.

Project Objectives

The project aims to enhance Moldova's energy security by diversifying its gas supply sources. The project will also include a gas sector reform action plan with the objective to liberalise and reform the Moldovan gas sector.

Transition Impact

Transition impact of the project derives from the following: i) market expansion - energy security; ii) frameworks for market - opening the Moldovan gas market for liberalisation.

The project will support the reform agenda in the gas sector through market liberalisation in compliance with Moldova's undertakings to EU and  Energy Community.

Client Information

REPUBLIC OF MOLDOVA

The borrower is the Republic of Moldova. For the project implementation purposes, the financing will be on-lent by the government of Moldova to VestMoldTransgaz ("VMTG"), a fully stateowned transmission system operator of Ungheni-Chisinau gas pipeline and Romania-Moldova interconnector.

EBRD Finance Summary

EUR 41,000,000.00

The EIB is considering to provide a parallel sovereign loan and the EU has committed to grant cofinancing for the project.

Total Project Cost

EUR 93,000,000.00

Environmental and Social Summary

This project has been assigned Category A (2008 ESP) requiring a comprehensive Environmental and Social Impact Assessment (ESIA) as the project is a greenfield development of a gas transmission pipeline. This project was initiated in 2013 and therefore the applicable Environmental
and Social Policy (ESP) is the 2008 version, although the project is also compliant with the 2014 ESP. The ESIA and supporting documents were disclosed for public review and comment on 22 March 2016 on the EBRD's web page among other, as set forth in the stakeholder engagement plan.

The proposed pipeline is approximately 120 km in length and 600 mm diameter.

The environmental and social appraisal of this project included several site visits (including various meetings and field visits) by EBRD staff. Further, an international consultant was retained by the Bank to prepare the ESIA. The ESIA utilised existing environmental and social baseline data. These
data were augmented by socio-economic baseline data gathered for this project during numerous local meetings, interviews and through the use of questionnaires. Public meetings were held for this project, as part of project scoping process, and a series of public meetings were held along the route of the pipeline as part of the local ESIA disclosure and consultation process.

This project extends over approximately 120 km from Chisinau to the west-northwest border with Romania in the area of Ungheni. Here the pipeline will connect to the Romanian gas distribution system. The pipeline crosses areas of relatively low population density, and the land is mainly in private agricultural use, including pastures, orchards and some forest. A large portion of the pipeline parallels an existing utility corridor and is adjacent to an existing road. This approach has been adopted to avoid and minimise environmental and social sensitivities. Further, a robust review of alternative alignments was completed to ensure that the final route was selected to avoid as many impacts as possible. Upon review of the alternatives, alignment 1b was selected. The pipeline will not impact critical habitat nor will it encroach upon any protected area, although it will cross 100 m of the buffer zone for the Plaiul Fagului Scientific Reserve, and will approach the border for the Cazimir Milesti Landscape Reserve (both alignments are allowed according to local legislation and EBRD requirements). It should also be recognised that the pipeline can accommodate micro-realignments of up to 1,000 meters based on any sensitivities or conditions that may be encountered during the construction phase. Any deviations outside this zone will require prior approval by the Bank.

While the alignment will approach some inhabited areas, there is no physical displacement required for this project. A framework document was prepared to address land acquisition and potential economic displacement in accordance with national law and EBRD requirements.

This project has applied the mitigation hierarchy, and as such, has avoided most significant impacts.

The main remaining impacts will be associated with the actual construction activities and adequate control over the contractors. The project has been designed and will be constructed and operated in accordance with national legislation (Law No. 86 on Environmental Impact Assessment, 2014) and EBRD performance requirements. This includes, among others, the requirements of the EU EIA Directive and Espoo requirements. The government of Moldova informed the government of Romania about this project, and the ESIA activities, inviting Romania to participate in the process.

The government of Romania replied that they did not need to be part of this ESIA process.

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

Technical Cooperation

The ESIA includes and Environmental and Social Management Plan (ESMP) and an Environmental and Social Action Plan (ESAP), both developed to ensure that impacts are mitigated and managed as anticipated in the ESIA. These documents rely on a series of management plans including erosion control, waste management, stakeholder engagement and grievance management, water crossings management, spill prevention and traffic management to outline specific mitigation and monitoring measures. As the main issues are related to construction activities, the ESAP call for items including limiting amount of open trench, securing any open trench near populates areas and locating worker camps outside of existing communities to minimise disturbance on the existing population. Further, careful coordination of project traffic will be required to ensure project traffic does not increase traffic risks around schools or during busy times. The ESAP also requires close interaction with local communities to ensure local population are aware of project activities, and that they know how to raise a grievance, without fear of retribution. The requirements of these plans will be a commitment by all contractors working on this project, and the owners will monitor conformance with these plans.

In addition to owner monitoring of the implementation of these plans, if the EBRD finances this project, the Bank's Environmental and Sustainability Department will monitor the environmental and social performance during construction and operation of the project.

Technical cooperation: The Bank hired Fichtner GmbH to perform an extensive technical, regulatory, financial, environmental and social assessment of the project. The assessment was financed by SIDA. Other assignments for engineering and regulatory assistance are considered and may be advertised in the future.

Company Contact Information

Mrs Aurelia Samson
aurelia.samson@mepiu.md
+373 22 496 796
1 Alecu Russo str., floor 16, office 163, Chisinau, Moldova, MD-2068

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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.