Krakow Plaszow II Project



Project number:


Business sector:

Municipal and environmental infrastructure

Notice type:


Environmental category:


Approval date:

31 Oct 2000



PSD disclosed:

05 May 2000

Project Description

Modernisation of mechanical treatment facility and construction of biological treatment facility at Plaszow waste-water treatment plant in Krakow, Poland. The extended investment programme will include the construction of sludge incinerator, main collector and recultivation of lagoons.

The principal objective is to modernise and extend Plaszow waste-water treatment plant so that it complies with Polish and EU effluent standards. The extended project also includes the construction of sludge incinerator, a collector, as well as rehabilitation of lagoons at Plaszow WWTP. The secondary objective is to assist in the improvement of MPWiK’s financial and operational performance through the preparation and implementation of a corporate development plan.

Transition Impact

The investment improved the quality of effluent from the Plaszów waste-water treatment plant. Plaszów is the main waste-water treatment plant in Kraków, which was identified as an environmental "hot spot" under the Baltic Sea Environmental Programme. The project also helped Kraków to improve compliance with the European Union’s environmental regulations. The amended loan agreement will additionally covenant the construction of a sludge biogas facility for electricity generation by the end of 2010. It is estimated that 7,800 MWh of electricity will be produced annually. Electricity will offset the Company’s electricity consumption covering about 40 per cent of the wastewater facility’s needs and will contribute to lower operating costs.

The Client

Krakow Water Supply and Waste Water Treatment Company (MPWiK).

EBRD Finance

The EBRD provides a senior loan of €29.7 million. Co-financing of €56.8 million provided by the European Union’s Instrument for Structural Policies for Pre-Accession (ISPA) and Cohesion Fund. The Polish Fund for Environmental Protection & Water Management loan and MPWiK’s cash flow finance the remaining €6.0 million of the investment costs. Moreover, EU-PHARE financed the efficiency enhancement programme for MPWiK with €0.5 million grant.

Project Cost

€93.0 million.

Environmental Impact

Categorised B/1 under 2003 Environmental Policy. This is a follow on extension project from the ones approved by the Bank earlier, which were subject to full environmental and social due diligence in line with the 1996 and 2003 Environmental Policies respectively. The investment programme agreed under the original projects has been duly implemented by the Company with adequate management of all environmental and social impacts associated with the investment programme.

The construction of the facility for generation of electricity from sludge biogas is expected to bring further significant environmental benefits, including reduction of CO2 emissions. According to initial estimates, the construction of the new sludge biogas facility for electricity generation would lead to a drop in CO2 emissions by at least 25,000 tonnes per annum.

The environmental and social due diligence showed that the proposed priority investment programme is associated with limited adverse environmental impacts and will result in further environmental and social benefits, and that the Company's operations are generally in compliance with the Bank’s environmental requirements. The priority investment programme will enable MPWiK’s continued compliance with the relevant EU environmental directives. The Company's environmental and social policy and management systems will be further developed and formalised. Specific actions have been identified and will form part of the Environmental & Social Action Plan (ESAP) for implementation during this Project.

Technical Cooperation

The EU’s Instrument for Structural Policies for Pre-Accession (ISPA) funded most of the technical assistance for the project preparation and consultancy support services during implementation. Bank Financing form the EU Bangkok was provided to support financial due diligence and the implementation of the efficiency enhancement programme was financed from this source.


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