The provision of a sovereign loan of up to US$ 200 million (€187 million) to the Republic of Uzbekistan ("RoU") to finance the modernisation of pumping stations used for irrigation water conveyance ("IWC") and other related infrastructure across three regions of Fergana valley (the "Project").
The Project is expected to enhance the resilience to climate change by improving energy and water efficiency in the national IWC system.
ETI score: 71
Primary Quality: Green. The Project will promote climate change mitigation through substantial energy efficiency savings and GHG emission reductions. The Project's GET share is 100%.
Secondary Quality: Well Governed. The Bank will support and contribute to developing the RoU's long-term policies in the sector and transition from an administrative approach of state regulation to market-based principles through institutional set up and governance improvements.
Ministry of Water Resources of the Republic of Uzbekistan
EBRD Finance Summary
Total Project Cost
EBRD offers a tenor and/or a grace period above the market average, which is necessary to structure the project. EBRD investment is needed to close the funding gap. At the same time, EBRD does not crowd out other sources, such as from IFIs, government, commercial banks and/or complements them.
The Bank will support the Ministry in achieving higher standards through its conditionalities (e.g. Procurement Policies and Rules, ESAP).
EBRD involvement in the Project will contribute to developing the RoU's long-term IWC sector reform.
Environmental and Social Summary
Categorised B (2019 ESP). The environmental and social ("E&S") risks and impacts associated with the rehabilitation of 118 pumping stations ("PS") used for IWC in three regions of Fergana valley have been identified. These will be managed by the implementation of an Environmental and Social Action Plan ("ESAP"). The environmental and social due diligence ("ESDD") for the Project was carried out by an independent consultant; it included an audit of the existing client's operations and site visits to selected PS. The project is expected to result in positive impacts on the irrigation coverage, sustainability and reliability, which, in turn, will provide additional opportunities for individual farmers/farming organizations engaged in agriculture.
The results of the ESDD indicate that the client has limited capacity and E&S system in place, and that requirements of national environmental legislation are not fully implemented. The client has no E&S Policy and no functional E&S management system in place, nor are any dedicated staff for managing E&S activities. Some permits (e.g. air emissions, waste disposal) were not available during the ESDD. To address these concerns, the ESAP requires appointment of E&S specialists at the Ministry of Water Resources of Uzbekistan, introduction of an E&S and OHS management system, and obtaining the water and waste permits. All the HR practices are in line with the stipulations of national legislation and ILO fundamental conventions ratified by the RoU. Still, there is not a formalised Human Resources Policy, or a grievance mechanism for workers at the regional Ministry's regional Pump Stations and Energy ("PS&E") units; this is requested in the ESAP.
The main E&S risks during the rehabilitation works are related to hazardous waste generation and soil contamination, as well as potential disturbance of nearby population by noise and air emissions. There are no signed contracts with specialised/licensed waste disposal companies. The management of hazardous substances and materials should be improved (e.g. leakages and spills on the ground, inappropriate storage of oil). Necessary improvements have been included in the ESAP. The requirements of the national occupational health and safety legislation are mostly implemented. However, some gaps in implementation of the national fire and electrical safety as well as sanitary-hygienic provisions were identified during the site visit. Community health and safety risks such as accidental fall into the water and electrocution were also identified during the field visit. Corrective actions are required in the ESAP (fencing or barriers along the open canals in sections passing through the settlements and fencing around the power transformers).
The land plots of the PS facilities are state-owned land. As some minor land take will be necessary (for the installation of fencing and in some locations for construction of a PS building) the Ministry is required to develop a procedure for formalising land tenure and identifying any land users (having farming activities / pasture land) around the pumping stations, investigating the extent of the Project-induced impact on their livelihood; and paying compensation to adversely affected people.
Some of PS are equipped with fish protection structures, however the majority are not. The ESAP requires installation of fish protection devices at water intakes and bird surveys at transformer substations (and if / where necessary, installation of protective devices to prevent the death of birds). The implementation of the Project components does not envision any significant excavation and earthworks, nor dredging. No impact on cultural heritage is anticipated. The mechanism of disclosing information and addressing external stakeholders' grievances is not in place. Therefore, a Stakeholder Engagement Plan and grievance mechanism observing Covid19 measures, have been developed for the Project.
Replacing pumps to their initial design capacity may lead to a water abstraction increase. At the same time, the introduction of automation will allow better demand-based water delivery to water consumers associations and farmers. In combination with auxiliary measures to reduce water delivery losses and strengthening on-farm water application (as envisioned under the Long Term Investment Program of the Government of Uzbekistan, for which this Project is an initial step), the de-facto per-hectare water volume supplied is envisioned to be reduced, as more precise flow control in volume and time will be provided.
The proposed mitigation measures have been summarized in the Environmental and Social Management and Monitoring Plan ("ESMMP"). The ESMMP is as a standalone document will be attached to tender documentation for selection of the Project's contractors and its implementation has been captured in the ESAP. The ESAP has been developed to ensure the Project is structured to meet the PRs, which will be agreed with the Client before Board. The Bank will monitor implementation of the ESAP through review of Annual Environmental and Social Reports ("AESR"), communications with the Client and site visits as necessary.
Technical Cooperation and Grant Financing
TC 1: Feasibility Study (technical, financial, environmental and social due diligence and institutional assessment). The assignment's cost is up to €475,000, funded by the EBRD Shareholder Special Fund ("SSF").
TC 2: Institutional, Governance and Digitalisation Improvements Programme to support the Ministry of Water Resources in implementation of the ongoing sector reforms. The assignment's cost is up to €700,000, to be financed by an international donor or the SSF.
Company Contact Information
1a Labzak street, Tashkent City, 100000, Uzbekistan
PSD last updated
21 Jun 2022
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