GrCF2 W2 - Dushanbe District Heating Project

Location:

Tajikistan

Project number:

49375

Business sector:

Municipal and environmental infrastructure

Notice type:

State

Environmental category:

B

Approval date:

07 Apr 2020

Status:

Approved

PSD disclosed:

21 May 2020

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

The provision of a 15-year sovereign-guaranteed loan of up to US$ 5.0 million ( €4.5 million) to the State Unitary Enterprise Dushanbe District Heating Company. The loan will consist of two tranches: Tranche I and Tranche II of up to US$ 2.5 million each. The EBRD loan is expected to be co-financed by a US$ 5 million grant from the EBRD's Shareholders Special Fund .

Project Objectives

The Bank's first district heating sector project in Tajikistan will include: (i) the rehabilitation of selected sections and potentially the expansion the district heating ("DH") network; (ii) the rehabilitation of pumping stations and the introduction of metering at pumping stations and pilot metering at apartment level; and (iii) the procurement of operational and maintenance machinery and equipment. The Project is proposed as a 'trigger' project for Dushanbe (the "City") under the Green City Framework 2 ("GrCF2").

Transition Impact

ETI score: 70

  • Green (primary): The Project will significantly reduce greenhouse gas ("GHG") emissions and air pollution from the City's district heating system and will support the City to develop a Green City Action Plan that identifies its challenges and sets verifiable targets;
  • Well-governed (secondary): the Project will facilitate the development and adoption of a Public Service Contract.

Client Information

DISTRICT HEATING COMPANY OF THE CITY OFDUSHANBE

The State Unitary Enterprise Dushanbe District Heating Company is a company providing integrated district heating distribution services in the City of Dushanbe and is wholly owned by the City.

EBRD Finance Summary

USD 5,000,000.00

A sovereign guaranteed loan in the amount of up to US$ 5.0 million to the Company.

Total Project Cost

USD 10,000,000.00

Additionality

The Bank is additional because of its:

    • Financing Structure: long-term financing terms that are not available in the market. The Bank's loan will play a key role in ensuring the Project's physical delivery and the Company's improved debt service capacity;
    • Risk mitigation: mitigate carbon transition risks and take climate action, such as to move along a low carbon transition pathway;
    • Policy, sector, institutional, or regulatory change: development of GCAP for the City and implementation of follow-up projects promoting significant environmental benefits;
    • Standard-setting helping projects and clients achieve higher standards: best international procurement standards.

Environmental and Social Summary

Categorised B (2014 ESP). The Project is expected to improve the quality and reliability of district heating in Dushanbe, increase the efficiency of operations, and reduce local air pollution and greenhouse gas emissions from the existing network. Environmental and social due diligence (the "ESDD") was carried out as part of the Feasibility Study by independent consultants. ESDD included an analysis of the proposed PIP, a review of the Company's current operations as well as E&S corporate management systems and capacity to implement the Project in accordance with the Bank's PRs. The due diligence also considered an assessment of affordability risks from a social dimension especially relating to vulnerable groups. An Environmental and Social Action Plan (the "ESAP") has been developed for the Project and will be agreed with the Company prior to Board approval. Stakeholder Engagement Plans (the "SEP") and a non-technical summary (the "NTS") have also been developed and will be disclosed.

The Company has assigned H&S and HR personnel with a good understanding of national legal requirements related to their operations; however, it needs to assign environmental responsibilities and raise capacity in relation to systematic approach to management. The Company is operating in compliance with national legislation and related permits (where issued) with some non-compliances to be addressed with corrective measures in the ESAPs.

The Priority Investment Plan (the "PIP") addresses investments related to increasing operating efficiency and reliability of the heating source and expansion of the heating network. The ESDD has shown that the Project increase water use efficiency and improve the reliability and quality of existing heating services. As the Project will be carried out within the confines of the existing boiler houses and within the existing distribution network of the Company, no land is planned to be purchased or acquired. The negative impacts are predominantly short-term in nature and relate to the construction/ rehabilitation works. The Project may restrict local access to businesses, open public spaces and shops due to route diversions and potential increased traffic; however these impacts will be managed under the relevant plans included in the ESAP.

The ESAP developed for the Company includes: improvements to EHS management systems, aligning technical specifications under PIP with EU standards, inclusion of ES requirements in the tender documents, requirements for development of a detailed Construction Environmental and Social Managements Plan (the "CESMP") to minimize any impacts related to the construction stage; review and formalisation of HR policies, implementation of internal grievance mechanism, establishment of contractor management and monitoring system and implementation of the SEP. The ESAP also addresses other aspects of the Company's operations (not directly linked to PIP) to align them with PR requirements, these include among other: securing relevant environmental operational permits, undertaking an asbestos survey, testing transformers oil for presence of PCB.

The Bank will monitor the implementation of the Project and the ESAP as well as the Company's environmental and social performance by reviewing the Company's annual environmental and social reports and undertaking monitoring visits as needed.

Technical Cooperation and Grant Financing

Pre-signing: (i) Technical due diligence, to support scoping and structuring of the project, financial analysis and an environmental and social assessment (cost is € 295,465).  

Post-signing: (i) Project Implementation Support, including tender support and contract supervision (estimated cost is € 500,000) and (ii) Corporate Development and Stakeholder Participation Programme, including public awareness programme and equal opportunities policies and procedures improvement (estimated cost is € 300,000).

Company Contact Information

Norov Farukh Burievich
dteploset@gmail.com
992-837-231-24-41
Borbad 48a street, Dushanbe, Republic of Tajikistan

PSD last updated

21 May 2020

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.

Project Complaint Mechanism (PCM)

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 accountability mechanism.

The accountability mechanism 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 our webpage to find out how to submit a complaint through the confidential online form, by email, mail or telephone. We are available to discuss your concerns and answer any questions you may have about the submission or handling of complaints. Complainants’ identities may be kept confidential upon request.

Please note that after the appointment of the new mechanism Head in 2020, the revised Project Accountability Policy and Guidance will come into effect to guide case handling.

 

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