GrCF2 W2 - Semey Solid Waste Management

Location:

Kazakhstan

Project number:

50142

Business sector:

Municipal and environmental infrastructure

Notice type:

State

Environmental category:

B

Approval date:

22 Dec 2020

Status:

Signed

PSD disclosed:

28 Dec 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 senior loan of up to KZT 3.83 billion (equivalent to €7.50 million) for the modernisation of the solid waste management (SWM) system in the city of Semey. It will include: (i) the construction of an EU standards compliant sanitary landfill and (ii) the construction of a biological solid waste treatment facility at the new sanitary landfill site. The oblast akimat will provide investment grant of up to KZT 2.99 billion (€5.86 million) to finance (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 Semey and (iii) the closure and remediation of the existing landfill. 

Project Objectives

The project will reduce greenhouse gas (GHG) emissions, increase waste recycling and recovery rates and improve environmental, health and safety standards. It will support the commercialisation, sustainability and better quality of SWM services. It will also facilitate private sector involvement with improved governance and contractual arrangements between service providers and the city akimat. Significant climate mitigation benefits will make the project an appropriate trigger investment under the EBRD Green Cities Framework.

Transition Impact

ETI score: 70

The project fully complies with the transition objectives of the Green Cities Framework by 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 TC support for (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); and (iii) operating, management, financial and implementation capacity building at the company level.

Client Information

SCE KELESHEK

SCE Keleshek, a municipal company 100 per cent owned by the city akimat.

EBRD Finance Summary

KZT 3,830,000,128.00

A senior loan of up to KZT 3.83 billion (€7.50 million) to the company. The loan will be backed up by the Project Support Agreement (PSA) between the bank, the East Kazakhstan oblast akimat , Semey city akimat and the company. The project will be co-financed by the oblast akimat in the amount of up to KZT 2.99 billion (€5.86 million).

Total Project Cost

KZT 6,819,999,744.00

Additionality

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; 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 (E&S) Policy, following an Initial Environmental and Social Examination. This concluded that 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 to the city by moving away from open dumping as means of solid waste management. This will be replaced by a more environmentally sustainable integrated solid waste management system, introducing better environmental and hygiene standards and reducing GHG emissions.

The project's environmental and social due diligence (ESDD) was undertaken by independent consultants as part of the project's feasibility study. ESDD included an independent E&S audit of the company's current operations, facilities and management capabilities, an analysis of potential E&S issues associated with the proposed priority investment programme (PIP) and tariff affordability issues, livelihood and gender-related impacts. The due diligence was carried out in a participatory manner and involved preliminary consultations with the key stakeholder groups.

The project is structured to fully meet EU requirements, including compliance with the BAT for waste treatment facilities. In particular, the new municipal landfill will be designed to comply with the EU Landfill Directive. The Project will also include the construction of modern facilities for solid waste separation and extraction of organic and other recyclable materials. While the project will not finance separate collection and separation of hazardous waste from households or businesses, the company will have separate contracts in place with private operators for the adequate and safe disposal of such waste streams. Additionally, the company will work with the akimat to achieve full compliance with the EU Waste Framework Directive's requirements in these areas.

The new landfill is expected to accommodate up to 150 - 175 tonnes of municipal non-hazardous waste per day at peak capacity by 2035. The new landfill's location and the waste treatment facilities are remote and far away from any sensitive environmental and social receptors. The closest residential building is approximately 3.8km away and the nearest surface water body, the River Irtysh, is over 17km away. Hydrogeological assessment indicates that the area's groundwater is located in depths of 4 to 10m and that the new landfill will be located above a confined groundwater aquifer that is protected by a thick natural loam layer of over 3m. This will have low permeability to provide a natural geological barrier. The new landfill will be engineered with a technical barrier solution using HDPE and clay to provide full assurance in addition to the natural geological layer of protection to minimise any risks of groundwater contamination in line with EU LFD requirements. Leachate will be collected, recirculated and treated at the new landfill and landfill gas production will be closely monitored for the possibility of introducing a biogas plant in the future.

The current municipal dumpsite is a safety hazard and is a source of constant pollution and unpleasant odours for the nearby population. Although not part of the Bank's financing, closure and remediation of the existing landfill in line with good international practice is one of the project's PIP components. This will be fully financed by the oblast akimat.

It has been identified that up to 25 people (12 of them are current landfill operator employees and their family members, and some of them residing on the premises of the landfill) carry out waste picking of recyclable materials at the existing dumpsite. Their livelihoods would be affected by closing the existing landfill and some of them may need to be resettled. Therefore, Livelihood Restoration and Resettlement Framework (LRRF) has been prepared for the company. LRRF includes the key principles and procedures for addressing economic displacement and livelihood impacts, as well as the entitlement framework for mitigating other PR5 impacts, if such impacts arise during the project implementation. The company will be required to hire a qualified resettlement expert to develop a Resettlement Action Plan (RAP) or Livelihood Restoration Plan (LRP), in line with LRRF and PR5.

The company will develop and adopt a human resource policy as per PR2 requirements, specifically addressing equal opportunity and non-discrimination, engagement with workers, a Code of Conduct, labour focused grievance redress mechanisms, and a Gender-based Violence and Harassment (GBVH) policy. The company's employees and contractor's workforce will be trained on the Code of Conduct, including the policy on non-discrimination and GBHV concerns.

The waste tariff increase for the population will be kept at the minimum possible level and will be mitigated by targeted support from the authorities to reduce any negative impacts on the most vulnerable parts of the population. Once the project has been fully implemented, it is expected that waste collection rates will increase from 80 to 95 per cent and that waste recovery and recycling rates will increase from 5 to 17 per cent. The project's completion will lead to an overall average annual reduction of GHG emissions of 11,975 tonnes CO2 equivalent.

An Environmental and Social Action Plan (ESAP) has been prepared for the project to address the environmental and social impacts identified during ESDD, as well as to ensure that it is structured to meet the EBRD PRs. This will be included in the legal agreements. The ESAP includes, among other issues, improvements in the Company's Environmental Health and Safety and Social (EHSS) management systems and practices, undergoing local EIA procedures, obtaining the necessary permits, and the assignment of a community Liaison Officer and extended stakeholder engagement after the project approval. A Non-Technical Summary (NTS) has been prepared and will be released to the project stakeholders through the company's/city's website. The NTS, LRRF and Stakeholder Engagement Plan (SEP) will be disclosed on the local website in English and Russian/Kazakh.

E&S considerations have also been incorporated into the associated post-signing TCs, including Capacity Building and Corporate Development (CB&CD) and Procurement and Implementation Support (PIS) support to assist the company to build its EHSS management capacity, implement the ESAP, LRRF, LRP / RAP, SEP. It will also help with annual environmental and social reporting to the Bank. The project components will be monitored in terms of their environmental and social performance, as well as ESAP and SEP implementation, through regular engagement of the Bank's E&S specialists to oversee the work of the PIS and CB&CD consultants. When deemed necessary, this will also include annual E&S reports and independent implementation audits.

Technical Cooperation and Grant Financing

Pre-signing:

TC1: Feasibility Study: €576,670 covering the project and a similar transaction in Ust-Kamenogorsk prepared in parallel, financed by the Government of Finland and the EBRD Shareholder Special Fund (SSF).

Post-signing:

TC2: Procurement and Implementation Support (PIS): up to €500,000, to be financed by the Austrian Fund for Municipal Infrastructure.

TC3: Capacity Building and Corporate Development (CB&CD): up to €350,000, to be financed by the SSF.

TC4: Support in preparation of GCAP for the cityup to €300,000,to be financed by the Austrian Fund for Municipal Infrastructure.

Company Contact Information

Mr. Erlan Syzdykov, Director, SCE Keleshek
erlan_3105@mail.ru
+7 705 321 5665
110 Dostoevsky street, Semey, 071400, Republic of Kazakhstan

PSD last updated

14 Sep 2021

Understanding Transition

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

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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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