Translated version of this PSD: Serbian
The provision of debt financing in an amount of up to EUR 70 million to Beo Cista Energija d.o.o Beograd, a limited liability company established with the sole purpose of operating and financing the Belgrade Solid Waste PPP project under a Design, Build, Finance, Operate, Transfer (DBFOT) scheme, and owned by consortium of Suez, Itochu and Marguerite Fund. The operation will enable the company to finance, construct and operate landfill and facilities for treatment and disposal of collected residual municipal waste generated in thirteen municipalities of the City of Belgrade for a volume of approximately 510,000 tons/year and treatment of Construction and Demolition Waste (CDW) in a volume of approximately 200,000 tons/year generated in its territory.
The project envisages construction of the Energy-from-Waste Facility (EfW), CDW Facility, remediation, closing and aftercare of the existing landfill and construction of a new landfill. The current landfill site Vinca, which has been in operation since 1977, is one of the largest landfills in Europe with coverage of 70h and is reaching its maximum capacity. Vinca is a non-sanitary landfill,without lining, gas collection and leachate treatment which creates significant environmental and health risks. The project facilities should allow the city to meet the biodegradable waste landfill diversion as well as the CDW recovery objectives set by the EU Waste Framework Directive. In addition, all facilities developed under the project will be compliant with applicable EU regulations, including the Landfill Directive and the Industrial Emissions Directive.
The transition impact stems from the following two transition qualities:
1) Resilient: The Project represents the first large scale environmental infrastructure concession in Serbia. It introduces a new form of financing of public service that has traditionally been financed from public funds. PPP is more likely to ensure sustainable funding and make the operation and maintenance less exposed to economic and political volatility. As the first and largest PPP in environmental infrastructure in Serbia, the Project is expected to have a demonstration effect in other sectors.
2) Green: The project will contribute towards the Bank's Green Economy Transition by enhancing innovation and broadening environmental dimensions of the solid waste management sector. The Project will result in significant greenhouse gas savings estimated at around 130,000 tonnes CO2-equivalent p.a. It will also promote the sustainability of natural resources and will reduce the degradation of ecosystems. The project will be complaint with applicable EU regulations and objectives set by EU Waste Framework Directive regarding biodegradable waste landfill diversion and CDW recovery objectives.
The client is a newly established special purpose vehicle, Beo Clean Energy, incorporated in Serbia in September 2017 by Suez-Itochu consortium (50/50), with purpose of building, operating and financing the Project. In October 2018, Marguerite Fund joined the consortium as a third equity partner. The Sponsors (Suez, Itochu and Marguerite Fund) invest on 40:40:20 basis.
EBRD Finance Summary
Up to EUR 70 million.
Total Project Cost
The Project has total investment size estimated at EUR 345.7 million, envisaged to be financed by equity and non-recourse debt from IFIs (EBRD, IFC and OeEB). The EBRD will provide an A loan facility of up to EUR 70 million to finance the Project and will mobilise an amount of EUR 21 million from the Green Energy Special Fund ("GESF"). Other financiers include IFC and OeEB, with loan facilities of up to EUR 70 million and EUR 35 million, respectively. IFC will also provide concessional financing of up to EUR 20 million from its Blended Climate Finance Program ("BCFP"). Both EBRD and IFC will mobilise B-loans of up to EUR 30 million each.
Environmental and Social Summary
Categorised A (2014 ESP). The project involves the establishment of a new EU-compliant solid waste management facility and an energy-from-waste plant. The Environmental and Social Impact Assessment (ESIA) that was prepared by the client, has reviewed by independent consultants on behalf of the Lenders and disclosed locally and on-line in November 2018. Initial public consultation with directly affected people has been carried out for the ESIA scoping , and a Stakeholder Engagement Plan has been developed that describes further stakeholder engagement activities, which will include additional public consultation as part of the local EIA approval process.
The project is located at the site of an existing waste dump at Vinca, to the west of Belgrade. As part of the project the existing dumpsite will be closed and subject to environmental remediation and management measures including leachate and landfill gas collection. The current site is 40 years old and is one of the largest uncontrolled dumpsites in Europe. It is located near the Danube River, which is receiving significant volumes of untreated leachate. The dumpsite is located on a hillside and is unstable and prone to periodic collapses. Part of the project involves re-profiling the site to increase stability and constructing a retaining wall to prevent further slippages.
Closing this dumpsite and replacing it with a managed facility will result in significant environmental and social benefits for the City and residents of Belgrade. The energy plant that will generate up to 29MW of electricity and 56MW of heat. The capture of landfill gas together with the generation of low-carbon heat and electricity is estimated to result in the avoidance of around 130k tonnes of CO2e per year.
Under the project agreement, the City of Belgrade is responsible for carrying out land acquisition and resettlement. The City prepared a Resettlement Action Plan (RAP) in line with PR 5, and families who used to live on the dumpsite in makeshift houses were relocated to apartments in the city at the end of 2018. The nearest other residences are located approximately 3km from the dumpsite. Waste pickers not living on the site will lose their income by 2020 as a consequence of the project. These are employees of the City's waste management company and 7 subcontracted secondary materials recycling companies. Livelihood restoration measures for these people have been provided in the RAP.
The project has been structured to meet Serbian legislation, EBRD Performance Requirements and IFC Performance Standards. The project will comply with national and EU waste management legislation including the EU Landfill Directive, applicable requirements of the EU Waste Framework Directive, and EU Industrial Emissions Directive, including BAT requirements for the energy-from-waste facility. Modelling that has been carried out demonstrate that impacts on air quality are within acceptable limits. Leachate from the existing and new waste sites will be captured and treated. The ESIA details mitigation and monitoring measures for project construction and operation. An ESAP has been developed that sets out how the project company should manage its own activities in line with lender requirements, including adoption of EHS and labour management systems, implementation of construction and operation management plans, and to ensure appropriate assessment of future electricity and heat distribution infrastructure. EBRD will monitor the implementation of the project closely, including via client reporting and periodic site visits.
Company Contact Information
Beo Clean Energy Tosin bunar 272v, 11070 Belgrade 11070 Serbia
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