The provision of a senior loan for the modernisation of the solid waste management (SWM) system in the city of Ust-Kamenogorsk (the City) to finance (i) the construction of an EU standards compliant sanitary landfill and (ii) the construction of a biological solid waste treatment facility at the new landfill site. The Oblast Akimat will secure co-financing for (i) the construction of a mechanical solid waste treatment facility and auxiliary infrastructure for the new landfill, (ii) rehabilitation of the waste collection points in the City and (iii) the closure and remediation of the existing landfill.
The Project will reduce greenhouse gas (GHG) emissions, increase waste recycling and recovery rates and improve environmental, health and safety standards. The Project will also promote long-term O&M contractual arrangements with private sector participants, sustainability and better quality of SWM services and improve governance and contractual arrangements. Significant climate mitigation benefits make the project an appropriate trigger investment under the EBRD Green Cities Framework.
ETI score: 70
The Project fully complies with the transition objectives of the Green Cities Framework, focusing on Green as the primary transition quality through the reduction of GHG emissions and Green Cities Action Plan (GCAP) development. The Project also contributes to the Well-governed quality, as it envisages (i) the introduction of a Public Service Contract (PSC) between the company and the city; (ii) the development of an integrated approach to solid waste management under the Waste Management Programme (WMP), including recommendations for improved contractual arrangements, new cost-recovery Landfill Gate Fee (LGF) setting approach and corresponding revisions to the end-user SWM service tariff; and (iii) the improvement of operating, management, financial and implementation capacity at the company level.
TAZA OSKEMEN SCE
A municipal company 100 per cent owned by the the Ust-Kamenogorsk's city akimat (the City Akimat). Existing exposure: (1) to the Client: none; (2) to East Kazakhstan oblast (the Oblast) under five Project Support Agreements (the PSAs): KZT 13.8 billion (€26.7 million).
EBRD Finance Summary
A senior loan of up to KZT 4.06 billion (€8.1 million) to the Client consisting of two tranches committed at signing: Tranche 1 - up to KZT 3.04 billion (€ 6.1 million), and Tranche 2 - up to KZT 1.02 billion (€ 2.0 million). The Loan will be backed by the PSA between the Bank, the East Kazakhstan Oblast Akimat (the Oblast Akimat), the City Akimat and the Client.
Total Project Cost
The Oblast Akimat will secure up to KZT 3.74 billion (€ 7.5 million) co-financing for the project (the Local Contribution).
Financing Structure: commercial financing for long tenors on a non-sovereign basis is currently scarce for utility projects in Kazakhstan.
Policy, sector, institutional, or regulatory change: developing the WMP.
Standard-setting, helping projects and clients achieve higher standards: improved reporting, environmental standards, capacity; higher inclusion and gender standards.
Knowledge, innovation, and capacity building: preparation of GCAP and TC support; the EBRD's knowledge of and experience in the SWM sector across its countries of operation.
Environmental and Social Summary
The Project has been categorised B in accordance with the 2014 EBRD Environmental and Social Policy (ESP), following an Initial Environmental and Social Examination, which concluded the environmental and social (E&S) risks and impacts associated with the Project are site specific and could be readily identified and addressed through design and effective mitigation measures. The proposed investment is expected to result in significant E&S benefits by moving the City away from uncontrolled dumping to a more sustainable integrated SWM system, introducing better environmental and hygiene standards and reducing GHG emissions.
The environmental and social due diligence (ESDD) for the Project has been undertaken by independent consultants as part of the Feasibility Study. ESDD included an independent E&S audit of the Company and an analysis of potential E&S issues associated with the proposed Project.
The Project will meet applicable EU requirements including the EU Landfill Directive, and will incorporate leachate collection and treatment and landfill gas collection and flaring. The Project will also include construction of a mechanical and biological treatment plant. Some elements of the waste management system that are outside the scope of the PIP may continue to fall short of EU requirements, for example in relation to separate collection and treatment of hazardous wastes, and the ESAP includes actions that will help close these gaps.
The new landfill will provide modern waste management for the city of 335,000 people. Its location is 18 km from the City and 6 km from the nearest village. The site has been confirmed as suitable and is not associated with sensitive E&S receptors. Although not part of the Bank's financing, the existing landfill, which operates with no environmental protection measures, will be closed and capped.
The existing dumpsite will be closed and covered. The option to collect landfill gas has been assessed but the volumes are too low for it to be feasible. The closure of the existing dumpsite and construction of a new sanitary landfill is expected to cause economic displacement impacts for 20 waste pickers, 32 employees of the landfill operator, and several land users, whose lease will need to be terminated. The Land Acquisition and Resettlement Framework (LARF) was prepared and adopted by the Company as the basis for addressing all land acquisition and resettlement impacts as required under the national laws and ESP Performance Requirements 5 (PR5). Once the scale of impacts is confirmed the Company will prepare and implement a Livelihood Restoration Plan (and/or Resettlement Action Plan) in line with LARF and PR5.
The affordability analysis carried out for the Project confirmed that the end-user tariffs will remain affordable to average and low-income households. The projected expenses for SWM services, as a share of households' income, will be less the affordability threshold of 1.5 per cent.
An Environmental and Social Action Plan (ESAP) has been prepared for the Project to address the environmental and social impacts identified during ESDD and to ensure that it is structured to meet the EBRD PRs. The ESAP includes among other issues the necessary improvements in the Company's Environmental Health and Safety management systems and practices, adoption of a PR2 aligned HR policy, assignment of a Community Liaison Officer, and enhanced environmental monitoring. In addition, to address the gender and inclusion aspects in the Project, ESAP includes a number of specific measures, such as promotion of equal opportunities and non discrimination at workplace, and implementation of anti-harassment policy. The Company will also develop and implement a diversity and gender equality plan. An associated post-signing TC assignment for Procurement and Implementation Support (PIS) will include social (gender) expert to help implementing gender-focused ESAP actions.
A Non-Technical Summary (NTS), LARF and a Stakeholder Engagement Plan (SEP) have been developed and will be agreed with the client prior to signing. E&S considerations have also been incorporated into the associated post-signing TC assignment for PIS. The Project components will be monitored in terms of their E&S performance and implementation of the ESAP and SEP through annual E&S reports, and site visits or audits when deemed necessary.
Technical Cooperation and Grant Financing
TC 1. Feasibility Study: € 584,670 covering the project and a similar transaction in Semey (OpID 50142) prepared in parallel, financed by the Government of Finland and the EBRD Shareholder Special Fund (SSF).
TC 2. Procurement and Implementation Support (PIS): up to EUR 490,000, to be financed by the SSF.
TC 3. Capacity Building and Corporate Development (CB&CD): up to € 300,000, to be financed by the SSF.
TC 4. Support in preparation of GCAP for the City: up to € 300,000, to financed by the SSF.
Company Contact Information
Abdildinov Ardak Muhanovich, Acting Director
+7 (7232) 21-57-40
+7 (7232) 62-02-04
58, Pogranichnaya St., Ust-Kamenogorsk, 070010, Kazakhstan
PSD last updated
08 Jun 2021
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Independent Project Accountability Mechanism (IPAM)
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