Regional Water Supply System Expansion

Location:

Montenegro

Project number:

50612

Business sector:

Municipal and environmental infrastructure

Notice type:

Public

Environmental category:

B

Target board date:

27 Nov 2019

Status:

Passed Final Review, Pending Board Approval

PSD disclosed:

20 Jun 2019

Translated version of this PSD: Montenegrin

Project Description

Provision of a sovereign guaranteed loan to "Regionalni vodovod Crnogorsko Primorje", the regional water supply company of Montenegro ("RWSC"), to finance: i) the construction of a direct pipeline to the municipality of Herceg Novi: ii) construction of a second 13 km long pipe from Budva to Tivat: and iii) the construction of a new secondary water supply network and a new wastewater infrastructure for settlements of Dobra Voda and Veliki Pijesak in the Bar municipality (the "Project").

Project Objectives

The project aims to improve the water supply in the coastal region of Montenegro. This region is the driver of Montenegro's tourism industry, which needs a further increase in water supply in order to continue its growth. The project will also benefit the local population, especially in areas that are not yet connected to the water supply system.

Transition Impact

The expected transition impact of the project includes:

i) improvement of the efficiency of water usage and water resources and rationalisation of the water services, which is necessary for further development of tourism in the coastal area in Montenegro;

ii) preparation of Corporate Governance Action Plan (CGAP), which will set up measures and actions to improve corporate governance of the company and assist the company to prepare a long-term corporate development programme.

Client Information

The RWSC is a state-owned enterprise established in 1976 for the purpose of providing potable water on a long-term sustainable basis to the local water supply companies in the coastal municipalities in Montenegro. RWSC supplies local coastal water companies with water natural springs near Skadar Lake which further distribute water to the end-consumers.

EBRD Finance Summary

EUR 24,000,000.00

The loan proceeds will be used as follows:

Tranche 1 - EUR 12 million to finance construction of a direct pipeline to the municipality of Herceg Novi, and construction of a water pipeline from Budva to Tivat,

Tranche 2 - EUR 12 million to finance construction of a secondary water supply network and a wastewater infrastructure for settlements of Dobra Voda and Veliki Pijesak in the Bar municipality.

Total Project Cost

EUR 29,900,000.00

Environmental and Social Summary

Categorised B (2014 ESP). The Project is an extension of the previous investment into water supply in coastal areas of Montenegro. The Project will provide substantial environmental and social (E&S) benefits through improving resilience of the local water supply to climate change and ensuring secure and reliable supply of high quality water in the Adriatic Sea coastal areas through construction of new pipes (“sub-components 1 and 2”), and provision of improved collection and treatment of wastewater in the Bar Municipality (“sub-component 3”) through construction of a new small WWTP with the capacity of 25,000 PE. The quality of the drinking water supply and wastewater treatment provided by the project components will meet relevant national and EU requirements. Over 65,000 residents and more than 300,000 tourists in the municipalities of Herceg Novi, Kotor and Tivat will have improved water services during high season and over 23,500 people will obtain access to potable water in Dobre Vode and Veliki Pijesak in Bar Municipality. The latter two residential areas will also benefit from having over 400,000 m3/year of wastewater collected and treated through the Project.

The E&S due diligence has been carried out by external consultants and consisted of an E&S audit/review of the Company's existing corporate management systems, facilities and operations; analysis of the E&S impacts and benefits of the Public Information Policy (PIP), as well as preparation of an Environmental and Social Action Plan (ESAP), Land Acquisition and Livelihood Restoration Framework (LALRF) and Stakeholder Engagement Plan (SEP) to structure the Project to meet EBRD Performance Requirements (PRs). RWSC has already obtained confirmation from the Environmental Protection Agency (EPA) of Montenegro in 2014 that the EIA consent issued in 2008 is still valid for sub-components 1 and partially 2, but further follow up will be required from the Company for all 3 sub-components to ensure the EIA/ESIA and permitting procedures are fulfilled

Technical Cooperation

- Technical, financial, environmental and social due diligence
- Feasibility Study of energy efficiency projects for the installation of solar panels on the roofs of the Company's buildings.
- Financial and Operational Performance Implementation Programme (FOPIP) to support establishment and management of the retail part of the business, that is, management of the
secondary water supply network and end consumers' relations. FOPIP will help RWSC enhance its commercial viability, administrative and managerial capacities.
- Project Implementation Support, including procurement, preparation and evaluation of tenders, contract award and administration, financial control, project management and reporting.
- Water Resources Management Plan.

Company Contact Information

Goran Jevric
direktor@regionalnivodovod.me
+382(0)33451921
+ 382(0)33451937
http://www.regionalnivodovod.me/
Trg Sunca bb 85310 Budva Montenegro

Business opportunities

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Public Information Policy (PIP)

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Text of the PIP

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Please visit the Project Complaint Mechanism page to find information about how to submit a complaint. The PCM Officer (pcm@ebrd.com) is available to answer any questions you may have regarding the submission of a complaint and criteria for registration and eligibility, in accordance with the PCM Rules of Procedure.