ESIF: Sliven Water Project

Location:

Bulgaria

Project number:

53562

Business sector:

Municipal and environmental infrastructure

Notice type:

State

Environmental category:

B

Approval date:

17 Jan 2023

Status:

Passed Concept Review, Pending Final Review

PSD disclosed:

13 Sep 2022

As per section 1.4.2 (iii) of the Directive on Access to Information: "For Projects approved by Bank management where the Board of Directors has delegated the approval authority, the PSD shall be disclosed at the start of the relevant no-objection notification period to a member country of the Bank in accordance with Article 13 (iii) of the Agreement Establishing the EBRD."

Project Description

Provision of a loan of up to EUR 12.6 million to Sliven Water Supply and Sanitation Company ("Sliven WSSC" or the "Company"), a water utility serving Sliven Region. The loan proceeds will be used to co-finance, alongside investment grants from the EU "Operational Programme Environment" 2014-2020 ("OP Environment"), the rehabilitation and upgrade of  water and wastewater infrastructure in two agglomerations of above 10,000 population equivalent in the region, i.e. Sliven and Nova Zagora (the "Project").

The loan will be funded by EBRD capital resources, with a guarantee from the European Structural and Investment Funds (the "ESIF guarantee").

Project Objectives

The project's main objectives are: (i) to help the Company increase compliance with EU directives on potable water and wastewater treatment in large agglomerations and (ii) to improve Sliven WSSC's operational efficiency.

Transition Impact

ETI score: 60

The Transition Impact of the investment stems from:

  • The Project's Green quality, via: (i) annual potable water savings, (ii) increased share of population connected to sewerage system and to centralized wastewater treatment;
  • The Project's Resilient quality via: (i) reduced dependence on full grant-based financing of capital expenditure and (ii) strengthened financial and operational performance and asset management practices.

Client Information

WATER AND SEWAGE COMPANY OF THE CITY OF SLIVEN

Sliven Water Supply and Sanitation Company, a 91 per cent state owned through the Bulgarian Water Holding, 6 per cent owned by Sliven municipality and the rest 3 per cent owned from the other municipalities in Sliven region utility company, is the sole provider of water supply and sanitation services to roughly 183,000 inhabitants in Sliven Region. The Company has signed a 15-year Public Service Contract with the Regional Water Supply and Sanitation Association, which gives it the exclusive right to provide services in the region and collect revenues from end consumers.

EBRD Finance Summary

EUR 12,600,000.00

The total financing of the Project will amount to up to EUR 12.6 million, funded with EBRD's ordinary capital resources. The loan is expected to benefit from the ESIF guarantee, covering 80 per cent of the total loan amount, issued by the Fund Manager of Financial Instruments in Bulgaria.

Total Project Cost

EUR 61,400,000.00

The total cost of the Project is estimated at EUR 61.4 million, excluding VAT and working capital and will be majority financed with investment grants from the EU's OP Environment.

Additionality

The EBRD offers financing not available in the market, e.g. tenor above market average and an innovative financing structure on commercial terms, which is necessary to structure the project. EBRD's involvement and expertise will mobilise the necessary resources to support improving the Company's long term creditworthiness as well as project implementation.

Environmental and Social Summary

Categorised B (2019 ESP). Environmental and Social Due Diligence (ESDD) for the Project under the ESIF/EBRD Water and Waste Water Financing Framework is being carried out as part of the Feasibility Study by independent consultants. It will include a review of the environmental & social management capacity and performance of the Sliven Regional Water Operator, a review of the EU application conditions, an assessment of the Project's potential E&S impacts; the scope for mitigation and/or management of the Project's E&S impacts and ability to comply with the Bank's PRs and with national and EU requirements. The ESDD reports are due in early October 2022 and this PSD will be updated then with the results and summary of any action plan.

Technical Cooperation and Grant Financing

  • Pre-signing TC covers the following activities: (1) technical and operational review of the Projects; (2) analysis of the key contractual arrangements; (3) financial modelling and analysis; (4) environmental and social due diligence and gap analysis; (5) procurement review and (6) confirming Projects' compliance with EBRD's Green Economy Transition framework. The TC is funded by the EBRD's Sustainable Infrastructure Policy and Project Preparation.

  • The Company is expected to benefit from a TC for financial and operational improvement to support the Company in strengthening its operations and financial performance and long-term debt service capacity. The budget will be potentially financed by funds from EBRD's Shareholders Special Fund.

Company Contact Information

Eng. Sevdalin Rashev, General Manager
viksliven@viksliven.com
00359 886 46 40 88
00359 044 623 413
www.vik.sliven.net
27 "6-ti September" Str. 8800 Sliven, Bulgaria

PSD last updated

13 Sep 2022

Understanding Transition

Further information regarding the EBRD’s approach to measuring transition impact is available here.

Business opportunities

For business opportunities or procurement, contact the client company.

For business opportunities with EBRD (not related to procurement) contact:

Tel: +44 20 7338 7168
Email: projectenquiries@ebrd.com

For state-sector projects, visit EBRD Procurement:

Tel: +44 20 7338 6794
Email: procurement@ebrd.com

General enquiries

Specific enquiries can be made using the EBRD Enquiries form.

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 compliance@ebrd.com. 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 ipam@ebrd.com to get guidance and more information on IPAM and how to submit a request.

 

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