Zadar Wastewater Project

Location:

Croatia

Project number:

50078

Business sector:

Municipal and environmental infrastructure

Notice type:

State

Environmental category:

B

Approval date:

07 Apr 2020

Status:

Approved

PSD disclosed:

14 Jan 2020

Project Description

Provision of a senior loan to Odvodnja d.o.o. Zadar ("Client"), a municipal company incorporated in Croatia, providing wastewater services to around 78,000 people in the City of Zadar, to co-finance, alongside EU Cohesion Funds, priority investments for the reconstruction and expansion of the wastewater network.

Total project costs are estimated at EUR 78.1 million, of which the EBRD is envisaged to finance up to EUR 4.5 million.

Project Objectives

The EBRD loan will support:  (i) rehabilitation and upgrade of the wastewater network, and (ii) upgrade of the two existing Wastewater Treatment Plants ("WWTPs") to reach EU & national environmental standards. The project will also result in a better connectivity with the wastewater system by creating access for approximately 95 per cent of the population in the area (vs 75 per cent currently).

Transition Impact

ETI score: 60

The project is GET eligible and contributes to the Green quality. The project will result in more sustainable and efficient wastewater management as well as enhanced resilience to climate change impact in the wastewater sector. It will also result in an increase of wastewater system connection (to approximately 95 per cent from currently 75 per cent) and thus improve the quality of the treated effluent discharged to the Adriatic Sea. The project will also contribute to the Well-Governed quality through improved governance of the publicly-owned enterprise.

Client Information

ODVODNJA DOO ZADAR

Odvodnja d.o.o. is a municipal company incorporated in Croatia, providing wastewater services to around 78,000 people in the City of Zadar and managing 185 km of wastewater collection system, 19 pumping stations and 2 WWTPs. The Company is 100 per cent owned by the City of Zadar.

EBRD Finance Summary

EUR 4,500,000.00

Senior loan of up to EUR 4.5 million

Total Project Cost

EUR 78,130,000.00

The total estimated project cost is EUR 78.1 million.

Additionality

There are two types of additionality for the project: financial and non-financial. Financial additionality is related to the project's financing structure, with the EBRD offering a tenor and grace period beyond what is currently available in the market, which is necessary to structure the project. Non-financial additionality sources include risk mitigation, with the EBRD helping the client to mitigate environmental, social and governance (ESG) risks and take climate action.

Environmental and Social Summary

Categorised B (2014 ESP). The Project involves investments in the water supply, sewage and wastewater treatment system of the Zadar-Petrcane agglomeration in order to meet the requirements of the Directive 91/271/EEC in the City of Zadar. This will be achieved through the construction and reconstruction of over 100 km of city collectors, 17 pumping stations and increase in connection to the public sewage system from the existing 75% to 95% of the population. The Project will also connect the two existing WWTPs (with a total capacity of 115,000 PE) which are operating in compliance with the EU requirements without further increasing their capacity. 

Environmental and social due diligence (ESDD) was undertaken by an independent consultant and included an assessment of the Project's potential Environmental and Social (E&S) impacts and a review of the Client's E&S management systems and capacities to implement the Project in line with Performance Requirements (PRs). An Environmental and Social Action Plan (ESAP) has been developed and agreed with the Client to address environmental and social (E&S) improvements required to bring the Project in line with EBRD PRs. 

An Environmental Impact Study in line with national requirements was prepared for the Project in 2017, based on which the Ministry for Environment and Energy issued a Decision in November 2017 that no further ESIA is required for the Project and that it will have an overall positive environmental impact. 

Currently the Company operates an informal EHS management system, but is not currently accredited. While Odvodnja has in place EHS management plans for the operation of the Company, further project-specific plans will need to be developed. For construction related impacts, a Framework Environmental and Social Management Plan (F-ESMP) has been prepared by the Consultants and ESAP requires the F-ESMP to be implemented by the Contractors. 

The Company operates in line with Croatian Labour Law. To ensure compliance with PR2, the Company will be required to establish a formalised grievance mechanism for its employees. 

As the Project will be implemented in a heavily urbanised area, no impacts are expected to biodiversity assets. Construction works are not expected to affect any cultural heritage sites. The Project does not involve any land acquisition and all works will be carried out on publicly owned land. However, the Project may cause temporary loss of income to the old town businesses due to access-related issues and heavy traffic while the works are being carried out. A Livelihood Restoration Framework (LRF) has been prepared to ensure compliance with PR 5. A Framework Traffic Management Plan (F-TMP) has also been developed to mitigate the potential traffic impacts. 

There has been public consultation carried out during the development of the Project.  A disclosure package that includes an overarching Non-Technical Summary, Land Acquisition Framework and Stakeholder Engagement Plan, including the grievance mechanism for the Project will be disclosed on Client's internet site. 

The Bank will evaluate the Project's environmental and social performance in accordance with the Bank's PRs through review of reports and monitoring visits as required.

Technical Cooperation and Grant Financing

Technical co-operation ("TC") for the Project include Environmental and Social Impact Assessment, to assess whether the procedures and policies utilized by the Company adhere to the EBRD's environmental and social standards.

Company Contact Information

Grgo Peronja
odvodnja@odvodnja.hr
+385 23 212 198
+385 23 211 426
www.odvodnja.hr
Hrvatskog sabora 2D, 23000 Zadar, Croatia

PSD last updated

06 Mar 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.

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 how to submit a Request for review through our confidential online form, by emailmail or telephone. IPAM is available to discuss your concerns and answer any questions you may have about the submission or handling of Requests, which follow the Project Accountability Policy and Guidance. Requesters’ identities may be kept confidential, upon request.

 

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