Loan of up to EUR 25 million to Apavital Iasi, the regional water operator in Iasi County and neighbouring localities.
The proceeds of the loan will be used to co-finance alongside EU Cohesion Funds an extension and modernisation of the company's water and wastewater infrastructure and services. The EU investment grants are being made available under the EU Large Infrastructure Operational Programme.
The project will enable Apavital to bring their water and wastewater services in line with EU environmental standards by co-financing the extension and rehabilitation of the company's water and wastewater network alongside the EU.
ETI score: 60
The Project is proposed for financing under the Sustainable Water Infrastructure Facility Framework ("SWIFT"). In line with SWIFT, the transition impact of the project will be achieved through:
- The development and implementation of a long term asset management plan.
- The support of environmental improvements and continued regionalisation of water and wastewater services in the County of Iasi.
SC APAVITAL SA
EBRD Finance Summary
Total Project Cost
Long term financing from commercial banks for this type of infrastructure projects is not widely available in Romania at present. In addition, the Bank's long standing experience in the Romanian water sector and unique ability to structure the AMP, define options for cost-efficiency improvements, and improve delegation contracts to ensure sustainability of the project make the Bank highly additional in this transaction and best placed to pursue the reform agenda.
Environmental and Social Summary
Categorised B (2014 ESP). The Environmental and Social Due Diligence (the "ESDD") for the project has been carried out as part of the project feasibility study by independent consultants and included a review of Environmental and Social (E&S) management capacity and performance of ApaVital and an assessment of the project's potential E&S impacts.
The environmental and social appraisal demonstrated that the environmental and social impacts of the proposed upgrading and expanding water supply and wastewater systems will be mainly of limited duration and extent and can be mitigated through standard methods and good construction practices. ApaVital operates an integrated management system for environmental, health and safety and human resources management and is certified to ISO14001, ISO22000 and OHSAS18001 and SA8000.
ApaVital it currently supplies potable water to 461,000 people and wastewater treatment services for 322,000 people in the county of Iasi. This project will add 75,000 people to the water supply network and connect 98,000 people to wastewater collection system increasing the connection rates from 63.9 to 74.5 per cent for water and from 44.7 to 58.4 per cent for wastewater. Upgrades to existing infrastructure will reduce the annual water losses by 11.5 million m3 per year. The project will bring the company operations into compliance with the service provision obligations of the EU Directive no. 98/83/EC on the quality of drinking water and Directive no. 91/271/EEC on wastewater collection and treatment by 2027 by providing compliant treatment of wastewater in all agglomerations with over 2,000 p.e. Due diligence has confirmed the sustainability of the water resources.
The investment sub-projects have undergone environmental screening by the competent authorities and a single Environmental Impact Assessment (EIA) was carried out to cover all proposed investments under the project. In accordance with the Screening Decision one Appropriate Assessment (AA) was developed for the impact of one small 4,928 p.e. capacity wastewater treatment plant and pumping stations (inside ROSCI 0378 and ROSPA0072). In addition, a Presentation Memorandum was prepared including an assessment of the limited sewer and water pipeline construction and network extension works to be carried out in Natura 2000 sites (ROSCI0135, ROSPA0158, ROSCI0265, ROSPA0150, ROSCI0363). The Official Custodians of the Natura 2000 sites have issued their endorsements for the works inside and nearby the Natura 2000 sites. The EBRD's independent consultants have reviewed the EIA and AA. The conclusions are that the overall integrity of the Natura 2000 sites and species will not be affected as there will be no reduction in the surface of the habitats or the number of individuals for protected species; there will be no habitat fragmentation; there will be no modifications in the dynamics and function of relations defining the structure and functioning of the protected sites; and that the project will not have a negative impact on the factors determining the maintenance of the favourable conservation status of the protected sites. Overall, the project is assessed to have a positive impact on the Natura 2000 sites through the reduction of untreated wastewater discharges into aquatic ecosystems.
There will not be any involuntary resettlement or expropriation / acquisition of private land related to project activities. Any temporary use of land and possible economic displacements that may result from the project will be carried out in accordance with the national requirements and EBRD's PR 5.
The Environmental and Social Action Plan (ESAP), which among others includes obtaining final Environmental Approvals for the EIA and the AA; updating of E&S management system plans and procedures; development and implementation of construction E&S management plans (including biodiversity management of Natura 2000 areas); contractor management and monitoring; temporary use of land and possible economic displacements; development of chance find procedure; and implementation of the Stakeholder Engagement Plan.
The Bank will monitor the project and implementation of the SEP and ESAP through annual reports provided by the client, and site visits as needed.
Technical Cooperation and Grant Financing
The EBRD will mobilise funds from donors to support technical cooperation.
The project benefited from pre-signing assignments included under SWIFT: technical and procurement review, environmental and social gap analysis, operational and financial due diligence of Apavital, legal and institutional due diligence on regionalisation. The amount of these assignments was EUR 102,000 and has been financed by the Bank's Infrastructure Project Preparation Facility.
In addition, the Project will benefit of post-signing TCs:
- Up to EUR 300,000 to be financed from an international donor or EBRD Shareholder Special Fund ('SSF') for the preparation and implementation of a corporate an AMP including: (i) reviewing the current status of the assets and databases; (ii) establishing targeted level of service and required assets improvements; (iii) development of a tool to monitor the performance of the assets using adequate software; (iv) planning of future assets acquisition aligned with a corresponding long-term financing strategy; (v) establishing dedicated plans for assets' routine maintenance, repair, renovation and replacement; and (vi) ensuring the appropriate organisational and regulatory arrangements to facilitate the sustainability of the AM P and the relevant software.
- Up to EUR 50,000 to be financed from the sector TC under the Memorandum of Understanding ("MoU") with Romania for the participation of the company in a national water sector programme including: strategic options for the development of the sector (water sector policy), new ways of financing, revised tariff methodology, asset management plans, benchmarking, training and capacity building.
Company Contact Information
PSD last updated
27 Feb 2020
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Environmental and Social Policy (ESP)
The ESP and the associated Performance Requirements (PRs) set out the ways in which the EBRD implements its commitment to promoting “environmentally sound and sustainable development”. The ESP and the PRs include specific provisions for clients to comply with the applicable requirements of national laws on public information and consultation as well as to establish a grievance mechanism to receive and facilitate resolution of stakeholders’ concerns and grievances, in particular, about environmental and social performance of the client and the project. Proportionate to the nature and scale of a project’s environmental and social risks and impacts, the EBRD additionally requires its clients to disclose information, as appropriate, about the risks and impacts arising from projects or to undertake meaningful consultation with stakeholders and consider and respond to their feedback.
More information on the EBRD’s practices in this regard is set out in the ESP.
Integrity and Compliance
The EBRD's Office of the Chief Compliance Officer (OCCO) promotes good governance and ensures that the highest standards of integrity are applied to all activities of the Bank in accordance with international best practice. Integrity due diligence is conducted on all Bank clients to ensure that projects do not present unacceptable integrity or reputational risks to the Bank. The Bank believes that identifying and resolving issues at the project assessment approval stages is the most effective means of ensuring the integrity of Bank transactions. OCCO plays a key role in these protective efforts, and also helps to monitor integrity risks in projects post-investment.
OCCO is also responsible for investigating allegations of fraud, corruption and misconduct in EBRD-financed projects. Anyone, both within or outside the Bank, who suspects fraud or corruption should submit a written report to the Chief Compliance Officer by email to firstname.lastname@example.org. All matters reported will be handled by OCCO for follow-up. All reports, including anonymous ones, will be reviewed. Reports can be made in any language of the Bank or of the Bank's countries of operation. The information provided must be made in good faith.
Access to Information Policy (AIP)
The AIP 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 following its entry into force on 1 January 2020. Please visit the Access to Information Policy page to find out what information is available from the EBRD website.
Specific requests for information can be made using the EBRD Enquiries form.
Independent Project Accountability Mechanism (IPAM)
If efforts to address environmental, social or public disclosure concerns with the Client or the Bank are unsuccessful (e.g. through the Client’s Project-level grievance mechanism or through direct engagement with Bank management), individuals and organisations may seek to address their concerns through the EBRD’s Independent Project Accountability Mechanism (IPAM).
IPAM independently reviews Project issues that are believed to have caused (or to be likely to cause) harm. The purpose of the Mechanism is: to support dialogue between Project stakeholders to resolve environmental, social and public disclosure issues; to determine whether the Bank has complied with its Environmental and Social Policy or Project-specific provisions of its Access to Information Policy; and where applicable, to address any existing non-compliance with these policies, while preventing future non-compliance by the Bank.
Please visit the Independent Project Accountability Mechanism webpage to find out more about IPAM and its mandate; how to submit a Request for review; or contact IPAM via email email@example.com to get guidance and more information on IPAM and how to submit a request.