Provision of a sovereign loan of up to EUR 75 million to the Republic of Serbia (the "Client") in two tranches: (i) up to EUR 50 million to be committed at signing ("Tranche 1") and (ii) an uncommitted tranche of up to EUR 25 million, to be committed at Bank's sole discretion following completion of due diligence ("Tranche 2"). Tranche 1 proceeds will be used for financing the construction of four regional waste management systems ("RWMS") in Kalenic (Central Serbia), Sombor (Northern Serbia), Duboko (Western Serbia) and Nova Varos (Western Serbia) solid waste regions and related technical consultancy services for supporting the project implementation and works supervision ("Phase 1"). Tranche 2 proceeds will be used for financing the construction of two RWMS in Pirot (South-eastern Serbia) and Sremska Mitrovica (North-western Serbia) solid waste regions and a multi-regional primary sorting system (i.e. purchase of containers and waste collection vehicles) within several solid waste regions and related technical consultancy services for supporting the project implementation and works supervision ("Phase 2"). The total project cost of EUR 150 million will be co-financed on a 50:50 basis with the French Development Agency ("AFD").
The Project aims to support the development of integrated and modern solid waste management systems compliant with EU standards via (i) the establishment of RWMS articulated around a regional centre covering several municipalities (particularly for the regional sanitary landfill); (ii) the establishment of primary sorting/recycling systems (material recovery facilities); and (iii) the treatment and recovery of biodegradable waste. Other investments relating to the infrastructure necessary for collection (waste bins/containers, vehicles and transfer stations) will also be included in the scope of the Project.
ETI score: 80
Primary quality: Green
The Project will promote resource efficiency by introducing sustainable waste management practices through the construction of sanitary landfills designed to EU standards, and the implementation of material recovery facilities, composting plants and a primary sorting system. The Project, including both tranches, is expected to contribute to reduction in Greenhouse Gas ("GHG") emissions of 282,433 tonnes of CO2 equivalent per year and result in significant health and environmental benefits. The Project will also involve policy dialogue related to development and adoption of Regional Waste Management Plans.
The Republic of Serbia represented by the Ministry of Finance ("MoF"). The Project will be implemented by the Ministry of Environmental Protection ("MoEP").
EBRD Finance Summary
Total Project Cost
The total project cost of EUR 150m will be co-financed on 50:50 basis with the AFD.
Financing structure: The EBRD offers financing that is not available in the market from commercial sources on reasonable terms and conditions.
Standard setting: the client seeks/makes use of the EBRD's expertise on best international procurement standards and higher environmental standards above "business as usual".
Knowledge innovation and capacity building: The EBRD provides expertise, innovation, and/or capabilities that are material to the timely realisation of the Project's objectives, including support to strengthen the capacity of the client
Environmental and Social Summary
Categorised A (2019 ESP). The Project involves the financing of a number of separate RWMS, one of which, Kalenic, is categorised A due to its capacity. The other three RWMS in the first tranche would be categorised B if financed as stand-alone projects. Sub-projects in the Tranche 2 will be subject to separate categorisation, appraisal and disclosure. Due diligence for Tranche 1 has been carried out with the assistance of external environmental and social consultants and has been split into two streams. For Kalenic a gap analysis of the local Environmental Impact Assessment ("EIA") has been carried out, while Sombor, Duboko and Nova Varos have been subject to an environmental and social appraisal. Overall, this is a long-term programme of works and the E&S safeguards have been designed to be incorporated into the project implementation phase in order to structure the project to meet the Performance Requirements.
The EIA for Kalenic was disclosed on 6 August 2021, together with a supplementary package which included a Non-Technical Summary ("NTS"), Stakeholder Engagement Plan ("SEP"), Land Acquisition and Resettlement Framework ("LARF") and Environmental and Social Action Plan ("ESAP"). The EIA prepared for national permitting purposes was updated in 2020, complies with local and EU EIA requirements and has previously been subject to local disclosure and consultation. To date the Bank has not received any comments on these documents. An NTS, SEP, LARF and ESAP have also been prepared for each of the other sites and have been agreed with the client. Each of the ESAPs include actions to establish environmental, social and labour management systems for the new landfills and to develop and implement construction and operation management plans. For Kalenic the final design for some elements, including the leachate treatment facility, landfill gas collection, waste treatment facility and composting plant, has yet to be determined. The environmental and social impacts associated with these components are described in general terms in the EIA and NTS. Supplementary impact assessments will be carried out once the design details are specified, and management plans will be updated accordingly.
This Project will upgrade a significant part of Serbia's waste management systems in line with EU standards and in support of the National Waste Management Programme. The first four sites will cover 29 municipalities and service over 900,000 people. It will establish EU-compliant landfills and introduce waste sorting and recycling, biodegradable waste treatment and recovery and supporting infrastructure. The Project will lead to the closure of numerous unmanaged dumpsites across Serbia. The improvement is waste management across the four sub-projects are expected to result in GHG emission reductions of around 178,000 tonnes CO2e per year as well as numerous other environmental and community safety improvements.
The Project is a multi-site programme of works which has a medium and long term horizon. Land acquisition and livelihood related risks and impacts can be divided into two categories. Firstly land acquisition associated with new RWMS facilities which will occur in the 1-3 years; and, secondly potential livelihood loss as a result of closure of existing waste dumpsites in the 3-5 year timeframe. Land for the main sites is publicly owned and independent ESDD has confirmed that no resettlement of households is required, although some land acquisition will be required for waste transfer stations. Livelihood loss through future restriction of access to waste pickers as a result of the short and medium term programme has been determined to be a low risk yet a LARF has been developed as a precaution for each site. With regard to the longer term programme and the eventual closure of unmanaged, unsanitary dumpsites, a limited number of informal waste pickers will be affected and the LRFs have been developed to address this issue prior to any impact occurring and in line with the project implementation cycle. Due to the longer term horizon and multiple site nature of the programme a framework approach has been adopted. Notwithstanding, independent ESDD indicated that none of the dumpsites are associated with a large number of waste pickers. For each dumpsite to be closed an E&S assessment will be undertaken and a livelihood restoration plan for each of these sites will include full baseline assessments and implementation of specific livelihood restoration measures, which includes specific reference to vulnerable groups. This will be closely monitored by EBRD.
Other potential impacts could relate to pollution of soil or ground water, odours and visual impacts. These can be readily addressed through good project design and site management, as supported by the ESAP. EBRD will monitor implementation of environmental and social commitments through annual reporting by the client and the PIU and periodic independent audits.
The sub-projects in Phase 2 have been categorised B and consultants have been engaged to carry out independent environmental and social appraisals of the Pirot and Sremska landfill sites. SEPs and ESAP have been prepared and agreed with the client prior to commitment of Tranche 2. Each of the ESAPs includes actions to establish environmental, social and labour management systems for the new landfills and to develop and implement construction and operation management plans.
The Project will upgrade a significant part of Serbia's waste management systems in line with EU standards and in support of the National Waste Management Strategy. It will establish EU-compliant landfills, close unsanitary cells, introduce landfill gas collection and improve waste sorting and recycling. The Project will also finance primary sorting systems that will support source separation and recycling of waste streams. The regions for these systems have not yet been chosen. Environmental and social impacts associated with waste sorting facilities are not expected to be significant but EBRD will review the proposals once finalised and update the ESAP if necessary.
No land acquisition or resettlement of households is required for the landfill sites. As with Phase I, implementation of the project will lead to the closure of numerous unmanaged dump sites. This will have significant environmental benefits but has the potential to negatively impact on waste pickers who earn income by retrieving waste from these sites. This issue was identified during the initial project appraisal and Livelihood Restoration Frameworks were agreed with the client to address it. The Bank has prepared a Terms of Reference for the development of Livelihood Restoration Plans. Contracting of consultants will happen in Q2 of this year. This approach is consistent with the first tranche and the livelihood restoration related component of the project will follow a longer term horizon in line with the project implementation schedule. EBRD will monitor implementation of environmental and social commitments through annual reporting by the client, the PIU Consultants reports and periodic independent audits.
Technical Cooperation and Grant Financing
- TC1: Environmental & Social due diligence for sub-project Kalenic (Category A), including all environmental and social aspects of project implementation.
- TC2: Project PIU support for Tranche 1, to assist the PIU set at the MoEP level with the preparation of tender documentation, tendering process, monitoring of the use of proceeds, and implementation support.
- TC3: Preparation of a Livelihood Restoration Plan & Implementation Programme.
Company Contact Information
Omladinskih brigada 1 - Novi Beograd
PSD last updated
01 Jun 2022
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Independent Project Accountability Mechanism (IPAM)
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