Aktau Waste Management Project

Translated version of this PSD: Russian

Project Description

The EBRD is considering providing an up to KZT 2.395 billion (EUR 12.7 million) to the State Communal Enterprise Koktem (“Koktem” or the “Company”), a solid waste management company in the city of Aktau (the “City”), to finance construction of modern solid waste management facility.

Mangystau Oblast regional authorities would like to establish a modern integrated waste management facility in Aktau. The current waste management practice was inherited from the Soviet era whereby most of the generated waste is landfilled without separation. The key benefits of the establishment of a modern integrated waste management facility are better environmental standards due to

(i) reduced landfilling,
(ii) lower CO2 and methane emissions
(iii) increased re-use and recovery of resources, and
(iv) production of “green electricity.

Measurement and monitoring of the project objectives achievement will be assessed through adherence to the Project implementation programme including ESAP. Regular monitoring reports will include the following physical indicators:

• percentage of solid waste that is recycled at the MBT;
• electricity production by the MBT facility;
• percentage of solid waste that is disposed of in a sanitary landfill after separation process.

Transition Impact

The transition impact of this project is expected to include:

• Introduction of market-based behaviour patterns through the demonstration effect. The project involves construction of one of the first modern integrated waste management plant with fully integrated waste disposal process (separation, recycling and green energy generation).
• Introduction of higher enhanced environmental standards through energy efficiency improvements in the City. The project will allow generation of green electricity from the waste, hence will contribute to lesser emissions.

The Client

The client for this project is the State Communal Enterprise Koktem in the city of Aktau in Mangystau Oblast, Kazakhstan. The Akimat of Mangystau Oblast will be the owner of the Company by the time of signing the Loan Agreement. The enterprise provides services in the municipal solid waste landfill operation.

EBRD Finance

EBRD senior loan of up to KZT 2.395 billion (EUR 12.7 million).

Project Cost

USD 4 0.7 3 million (EUR 31 .4 million) including related technical cooperation assistance to support the Company with the project preparation, implementation and institutional support.

It is expected that the EBRD loan will be supplemented by a loan of up to USD 8 million (EUR 6 .4 5.8 million) from the Clean Technology Fund (“CTF”).

Environmental Impact

The project has been categorised A in accordance with EBRD's 2008 Environmental and Social (E&S) Policy, because the construction of a new waste management facility could have potentially significant and diverse adverse future environmental and social impacts.

The E&S due diligence for the project has included an Environmental and Social Impact Assessment (ESIA) for the project and an E&S audit of the existing waste management facilities and operations. The ESIA concluded that the project will result in significant improvements with regard to community health and environmental protection through improvement of the quality of solid waste management services in Aktau, improved energy efficiency, reduction in use of landfill and lower air emissions.

The project is designed in accordance with national and EU waste management legislation including EU framework legislation on waste, and legislation on waste management operations and specific waste streams. The introduction of waste sorting facility into the solid waste management system will allow extensive recovery of valuable fractions from the municipal solid waste stream which was previously sent to landfill. At the same time the volume of waste sent for final disposal will decrease by 50-55 per cent. Most of the biodegradable waste fraction will now be sent to anaerobic digestion. This benefit will, in its turn, result in a number of secondary benefits including:

• Decreased risks of leachate formation at the landfill meaning significantly lower risks for soil and underground water pollution;
• Better sanitary situation at the landfill and improved working conditions
• Significantly lower risk of fires at the landfill which means improved safety for workers, mitigation of nuisance for population and mitigation of excessive air emissions risks;
• In general the waste disposed at the landfill will be of a more inert nature than previously.

Further, one of the essential environmental benefits will be energy recovery from the organic waste stream and generation of green electricity and heat energy from biogas.

No significant issues have been identified with respect to the location of the proposed facilities. An Environmental and Social Action Plan (ESAP) has been developed for mitigation of identified E&S issues and impacts during preparation, construction and operation of the project, and to bring the Company's operations into compliance with the EBRD's PRs.

Although closure of existing dump sites is not part of the EBRD project, it is important that the existing dumpsite is safely closed and mitigation measures are implemented to minimise the impacts of economic displacement on waste pickers. These mitigation measures are included in the ESAP.

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

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

Technical Cooperation

The following technical co-operation (“TC”) funds are envisaged as part of this project:

• Preparation of a feasibility study with detailed priority investment programme, EUR 295,380, financed by the Korean Donor Fund;
• Project Implementation Support Consultants to assist the Company with the project management, design, procurement, engineering and supervision of works, up to EUR 590,000, donor to be identified;
• Corporate Development Programme Support Consultants to the Company to support operational and financial improvements to secure sustainability of the Company operations via implementation of a Financial and Operational Performance Improvement Programme (“FOPIP”), introduction of a Public Service Contract (“PSC”) between the Company and the City, development of a Business Plan and Management Information System (“MIS”), up to EUR 295,000, donor to be identified.

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