Kutaisi Water Project Phase II



Project number:


Business sector:

Municipal and environmental infrastructure

Notice type:


Environmental category:




PSD disclosed:

15 Apr 2009

Project Description

The EBRD is considering a second phase project following the Kutaisi Water Supply Improvement Project Phase One (total cost EUR 12.5 million) which is currently financing water supply priority investments. The Kutaisi Water Supply Improvement Project Phase Two will fund additional water supply, wastewater treatment and storm water investments in the Avtoqarkhana district of the City containing almost 40,000 residents, or 35 per cent of the total population.

Transition Impact

Phase Two is intended to extend the transition impact achievements of Phase One, and will bring enhanced Transition Impact with two additional initiatives:

  • The first would be advice to the Company to prepare and implement a hydraulic model, which is a tool to monitor, manage and predict the flow, pressure, usage, and loss of water throughout the entire municipal water system. The technical and commercial value of such a tool has been made clear during the implementation of Phase One. It would help the Company to become more commercial by understanding better its water usage and water losses, to better target leakage reduction, pipe repair and metering, and to optimise longer term investment planning and implementation.
  • The second would be a possible technical co-operation programme to support the Government of Georgia, if requested, to prepare for and invite expressions of interest for a regional public-private partnership for the management of municipal water services in a region of Georgia. This initiative is currently under consideration by the Government of Georgia.

The Client

The EBRD loan will be provided to Georgia and on-lent to the Kutaisi Water Company, which implements the project and makes the loan repayments to the government from its tariff revenues. The City of Kutaisi and the Ministry of Economic Development will enter into a project support agreement containing performance undertakings.

EBRD Finance

The proposal is for a loan of up to EUR 1.5 million EBRD loan to Georgia to finance municipal water supply capital expenditure.

Project Cost

The total project cost is estimated to be up to EUR 13.8 million. The Bank will lend EUR 1.5 million, a grant of EUR 10.3 million is considered from donors and there will be a EUR 2.0 million local contribution.

Environmental Impact

Screened B in accordance with EBRD's 2008 Environmental and Social Policy. The project will improve the quality and efficiency of water supply and wastewater collection in the Avtoqarkhana district of the City of Kutaisi, thus providing uninterrupted access to safe drinking water, preventing pollution of the watercourses and improving public health.

The environmental and social due diligence is on-going and will include an environmental, health and safety and social audit to assess the Company's current environmental and social management systems and the Company's past and current performance against EBRD's Performance Requirements (PRs), and environmental and social analysis of any potential environmental and social impacts and benefits of the priority investment programme (PIP). An Environmental and Social Action Plan will be prepared and agreed with the Company to address any environmental and social issues identified during the due diligence to achieve and maintain compliance with the Bank's PRs within a reasonable time-frame. The Client will develop a Stakeholder Engagement Plan, including a grievance mechanism, and will release information on environmental and social performance and a summary of the agreed Action Plan to stakeholders. This PSD will be updated when the results of due diligence are known.

Technical Cooperation

Three technical co-operation assignments are considered to support project development and institutional development as follows:

  • Technical review has already been conducted (funded by SIDA)
    The objective of this assignment was to assist the Bank with the technical due diligence of the proposed Kutaisi II project.
  • Implementation Support and Engineering Services for the Project Implementation Unit
    Support will be provided to assist the Project Implementation Unit to prepare the detailed designs and tender documents, and to assist with procurement, project implementation and monitoring. There will also be a component to provide services to develop and implement a hydraulic model for the Kutaisi municipal water and wastewater system. (implementation of the assignment is subject to availability of funding).
  • Advisory Services to the Government of Georgia on the Preparation and Implementation of a Public-Private Partnership for Smaller Municipality Water Utilities
    Support will be provided to the Government of Georgia to evaluate the potential for a public-private partnership for the management and operation of a group of smaller municipal water utilities in a region or regions of Georgia. The consultants will conduct a review of the potential for such a PPP, carry out a market survey of potential companies and candidate municipalities, and assist the government to prepare recommendations and a draft tender document with which to invite expressions of interest. (implementation of the assignment is subject to agreement with the Government of Georgia).

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)

The PIP sets out how the EBRD discloses information and consults with its stakeholders so as to promote better awareness and understanding of its strategies, policies and operations. Please visit the Public Information Policy page below to find out how to request a Public Sector Board Report.
Text of the PIP

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