Karakalpakstan Solid Waste Project

Location:

Uzbekistan

Project number:

50696

Business sector:

Municipal and environmental infrastructure

Notice type:

State

Environmental category:

B

Approval date:

26 Jan 2022

Status:

Passed Final Review, Pending Approval

PSD disclosed:

13 Apr 2021

Project Description

The provision of a sovereign loan of up to US$ 70 million (€ 57.8 million) to the Republic of Uzbekistan for the benefit of Karakalpakstan Toza Hudud, a state unitary enterprise owned by the State Committee for Ecology and Environmental Protection, to finance the modernisation of solid waste management (SWM) infrastructure in Karakalpakstan (Project).

Project Objectives

The loan proceeds will be used to finance the construction of new EU standards-compliant sanitary landfills, waste sorting plants, waste transfer stations and the supply of special equipment and vehicles. The Project is expected to bring significant health and environmental benefits and result in greenhouse gas (GHG) emissions savings.

Transition Impact

ETI score: 62

Primary TI Quality: Green. The Project will promote resource efficiency by introducing sustainable waste management practices in the region through the construction of sanitary landfills designed to EU standards and waste sorting plants. It is expected to contribute to GHG emissions savings and result in significant health and environmental benefits. The Project's estimated GET share is 100 per cent.

Secondary Quality: Inclusive. The Bank will support the Committee in rolling-out a training programme to improve skills development for youth in the region in partnership with local vocational schools. The focus will be on the development of market-relevant technical skills needed for middle and high skill job opportunities in the SWM sector and transferable green skills. The Bank will also support the Project Company in developing an Equal Opportunities Action Plan to increase female representation in male-dominated occupations.

 

Client Information

UZBEKISTAN SOVEREIGN

EBRD Finance Summary

USD 70,000,000.00

A loan of up to US$ 70 million  to the Republic of Uzbekistan for the benefit of the Project Company.

Total Project Cost

USD 79,950,000.00

Additionality

Financing structure: the EBRD offers a tenor and/or a grace period above the market average, which is necessary to structure the project. The EBRD investment is needed to close the funding gap. At the same time, the EBRD does not crowd out other sources, such as from IFIs, government, commercial banks and/or complements them.

Risk mitigation: the EBRD helps the client to mitigate environmental, social and governance (ESG) risks, helping the client to identify risks related to the depletion of natural capital assets, raw materials and water availability etc. and manage these risks.

Standard-setting: helping projects and clients achieve higher standards: Client seeks the EBRD expertise on higher environmental standards, above 'business as usual' (e.g. adoption of emissions standards, climate-related ISO standards etc.).

Environmental and Social Summary

Categorised B (ESP 2014). Environmental and social due diligence (ESDD) for this project was carried out by independent consultants and included site visits to the proposed landfill sites and current landfills to select the most suitable location for Project facilities, interviews with representatives of the Project Company responsible for waste handling, reviews of available documentation and proposed landfills design. The due diligence identified that potential adverse impacts of the Project will be local and temporary, whereas the implementation of the Project will improve the waste handing standards and thus sanitary and epidemiological situation in the region. Currently there are no EU-compliant landfills in Uzbekistan and current landfills tend to be waste dumps with no leachate and landfill gas control.

The Project is structured to meet EU standards and the proposed landfill design and waste transfer stations are based on the EU Landfill directive and BAT Conclusions for Waste Treatment Facilities. It will comprise the establishment of a new landfill on unused land around 4km from Nukus city, and the rehabilitation and upgrade of three current dumpsites, plus waste transfer stations. The landfills will have waste sorting and composting facilities. Around 14 current dump sites will be closed once the new facilities are operational. The new and upgraded landfills will reduce impacts on soil and groundwater quality, and monitor odours, air emissions and noise levels. It will lead to an increase in properly managed solid waste of 330 thousand tonnes per year, and reduction in GHG of around 43ktCO2e per year. The project design provides for waste sorting plants to separate recyclables and compostable waste.

The detailed ESAP is currently being finalised following the Bank's review and will be agreed with the client prior to Board submission. It includes measures to enhance the client capacity to implement and manage the project in line with applicable EU standard and the Performance Requirements. It will also need to develop contractor management procedures to ensure that construction and transportation and other service contractors adhere to the Bank's Performance Requirements. The client will also need to develop and rollout a worker grievance mechanism in line with the Bank's requirements. The PIU will assist with ESAP implementation the Bank will be supporting a Corporate Development Programme. Additional specific TC support for ESAP implementation is also being considered.

Technical Cooperation and Grant Financing

Pre-Signing TC:

Feasibility study for the Project to include technical, financial, environmental and social due diligence. The assignment's cost is up to €440,000, funded by the EBRD Shareholder Special Fund ("SSF").

Preparation of a Livelihood Restoration / Resettlement Framework. The assignment's cost is estimated at €72,000, expected to be financed by the SSF. The assignment also covers Horezm Solid Waste Project (OpID 50697).

Post-Signing TC:

Corporate Development Programme to the Project Company to enhance its institutional, operational and financial capacity. The assignment's cost is estimated at €200,000, to be financed by an international donor or the EBRD SSF.

Skills Training Programme for youth in the region. The estimated cost of the assignment is up to €60,000, proposed to be funded by a bilateral donor or SSF under the Gender and Economic Inclusion TC Framework.

Company Contact Information

State Committee for Ecology and Environmental Protection – Khusniddin Allayarov
xusniddin.allayarov@eco.gov.uz
+998-71-207-0770 (Ext.7006)
https://www.uznature.uz/
2A, Toytepa str., 100077 Tashkent, Uzbekistan

Implementation summary


PSD last updated

10 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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