The provision of a sovereign loan of up to EUR 19 mm to the Republic of Uzbekistan to finance rehabilitation of the existing 11.2 MW hydropower plant of JSC "Uzbekhydroenergo" located in the Tashkent region on the Chirchik River at Nizhne-Bozsuy HPP Cascade (HPP-19). The Project is a sub-project under the Uzbekistan Climate Resilience Framework ("UCRF").
The Project's objective is to contribute to the strategic investment program for the development of the hydropower sector of Uzbekistan via the rehabilitation of current HPPs, which will play a crucial role in decarbonisation and climate resilience efforts of the power sector of Uzbekistan.
ETI score: 60
The project is expected to contribute to (i) the Green Transition Impact ("TI") quality, through delivering climate mitigation benefits. The Project will extend the lifetime of the HPP, allowing it to continue to deliver low-carbon electricity to the system. The project also contributes to (ii) the Well-governed TI Quality through bringing improvement to the Clients' environmental and social management system in line with international standards ISO 14001/45001.
The Project implementing entity will be JSC "Uzbekhydroenergo", a 100 per cent state-owned joint-stock company operating all hydropower generation assets (40 HPPs) in Uzbekistan.
EBRD Finance Summary
Total Project Cost
Environmental and Social Summary
Categorised B in accordance with the EBRD's 2014 ESP. Environmental and Social (E&S) due diligence of each of the sub-projects in Cluster-1 has been undertaken by an independent consultant in parallel with the corporate due diligence to be completed for the Framework. The ESDD included a site visit of each Cluster-1 HPP prior to COVID-19 restrictions and meetings with the management at HQ. The Project will involve modernisation and replacement of turbines and other equipment at the HPPs, which is expected to improve the efficiency of the power generation and avoid GHG emissions as well as reduce local air emissions.
The ESDD indicated that the implementation of the sub-projects will not have impacts on transboundary water resources agreements or result in water resource use conflicts, and that the projects are located in areas of low environmental and social sensitivity. The main E&S risks are related to the Client's capacity to implement the Project, occupational health and safety and waste management (during rehabilitation and operation phases). These risks will be managed through the ESAP, which is being discussed with the Client and will be finalised before signing. Overall the sub-projects will result in net benefits and the residual impacts can be readily identified and mitigated through the adoption of standard Good International Practice. However, there are currently several potential non-compliances with national E&S regulations related to waste management practices and periodic pollution of canal waters from leaks of oils from the HPP equipment. The HPPs were constructed before an EIA was required by the national regulation and no environmental assessments were undertaken. The Company will need to prepare an Environmental Impact Statement (EIS) for the remediation works on each HPP.
ESDD showed that the Company's E&S management needs to be further developed and cascaded at project level. The key issue is ensuring there is no permanent or temporary loss of employment or income as a result of the project implementation. Employees interviewed on site expressed they were happy with wages, benefits and conditions. The Company does currently not have a formal employee grievance mechanism; this is required to be implemented in the ESAP. No noise monitoring is conducted. There is currently an issue of waste management, and in particular management of floating refuse that is carried by the canal waters and accumulates at the HPPs. For the rehabilitation works, a waste management plan will be prepared and will include management of hazardous waste such as asbestos-containing materials, PCBs (any equipment that contained PCBs will probably need to be disposed of at an appropriate facility, possibly outside Uzbekistan) and contaminated soils (visible traces of hydrocarbons contamination were observed on site). The ESAP also requires that a waste management study be performed to estimate types and quantities of wastes that will be generated by the Project (during construction and operation), identify waste management facilities in the region, assess the facilities' capacities and suitability for managing the Project waste, develop a waste management strategy and estimate waste management costs. Where the sub-projects include canal dredging, a sediment quality assessment will be conducted and any contaminated sediment managed in alignment with Good International Practice (GIP).
The occupational health and safety culture and practices on site need to be improved and the sites have numerous poorly protected work place hazards. Nevertheless, the Project is expected to improve the occupational health and safety situation at the HPPs, because the aging equipment will be replaced by modern equipment, with health and safety features in alignment with GIP to minimise workplace risks. During the project implementation, road traffic will comprise delivery of equipment items and waste transportation, which will represent only a few deliveries.
Replacement and rehabilitation of the turbines will reduce oil leaking from turbines that pollute the canal water which is currently a health risk for communities who use the canal water for irrigation, and for recreational purposes (fishing and swimming). The project implementation is not expected to require land acquisition, involuntary resettlement or economic displacement and will not materially affect the current flow. Laydown areas, parking areas and temporary offices required by the contractor will all be located within the perimeters of the HPP sites. The project is not expected to impact biodiversity, as the disturbed areas are within the project sites, and surface water affected is a manmade canal and as the flow regime will not be affected and water quality will be improved, to ensure that biodiversity features that may have colonised the canal will be maintained. No issues with sharing of water resources with irrigation are expected as (i) the laws of the Republic of Uzbekistan include provisions that priority is given to irrigation needs over hydropower needs, and (ii) the Project will not consume more water in the future than the current situation and will not alter the flow in the Boszu canal. The SEP for Cluster-1 has been prepared during the ESDD. Consultations are yet to take place, and will occur concurrent with project implementation. The ESAP has been developed for Cluster-1 projects, much of which focuses on the adequate management of sub-contractors that will be appointed to implement the projects. The Bank will monitor implementation of the ESAP through review of annual Environmental and Social Reports and communications with the Company as necessary.
Technical Cooperation and Grant Financing
Technical assistance to support the project implementation unit with the procurement for the Project.
Company Contact Information
PSD last updated
14 Jul 2020
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Independent Project Accountability Mechanism (IPAM)
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