Horezm Solid Waste Project

Location:

Uzbekistan

Project number:

50697

Business sector:

Municipal and environmental infrastructure

Notice type:

State

Environmental category:

B

Approval date:

27 Oct 2021

Status:

Concept Reviewed

PSD disclosed:

02 Apr 2021

Project Description

The provision of a sovereign loan of up to US$ 50 million (€ 41.3 million) to the Republic of Uzbekistan for the benefit of Horezm 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 Horezm Region.

Project Objectives

The loan proceeds will be used to finance the construction of new EU-compliant sanitary landfills, waste sorting plants, waste transfer stations and 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: 60

Primary TI Quality: Green - GET direct track. 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. The Project is expected to contribute to GHG emissions savings and result in significant health and environmental benefits. The Project's expected GET share is 100 per cent.

Client Information

UZBEKISTAN SOVEREIGN

EBRD Finance Summary

USD 50,000,000.00

An up to US$ 50.0 million loan to the Republic of Uzbekistan for the benefit of Horezm Toza Hudud.

Total Project Cost

USD 57,200,000.00

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, 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). The independent environmental and social due diligence is currently being finalised. The ESDD included site visits to the number of proposed landfill sites and existing landfills in order to select the most suitable location for Project facilities, interviews with the State Ecological Committee and representatives of Toza Hudud enterprises responsible for waste handling, reviews of available documentation and proposed landfills design. The ESDD to date, conducted as part of the Feasibility Study,  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 Horezm region. Currently there are no EU-compliant landfills in Uzbekistan and existing landfills tend to be waste dumps with no leachate and  landfill gas control. The Project is structured to meet EU standards and the proposed landfills design and waste transfer stations are based on EU Landfill and BAT Conclusions for Waste Treatment Facilities, as well as  Waste Incineration Directives for the proposed small medical waste incinerator. The land plots for the proposed landfills have been allocated by the Uzbekistan authorities in 2017. The majority of the proposed waste transfer stations will be built within the perimeter of the existing landfills, which should minimise the landtake required for the Project. The ESDD identified that the Project is largely compliant with the Uzbekistan national legislation; however the national Environmental Impact study will need to be updated to take into account the most recent design and location of the landfills. The environmental and social management structure and capacity of the Client will also need to be enhanced to facilitate the implementation of and the compliance of the Project with the EBRD Performance Requirements. The Project will need to develop Contractor Management procedures to ensure that construction and transportation and other services  contractors adhere to the Bank's Performance Requirements. The Client will also need to develop and rollout an worker grievance mechanism in line with the Bank's requirements. As the Project involves the use of existing landfills for siting of the  Waste Transfer stations, required soil and groundwater contamination surveys will need to be conducted prior to construction to identify any legacy issues and also incorporate required clean-up and remediation measures. The robust design of the new landfills should allow mitigation of potential impacts on soil and groundwater quality, and also monitor odours, air emissions and noise levels. The Project  design also provides for waste sorting plants to separate recyclables and compostable waste. A small quantity of hazardous waste will mix in the municipal solid waste and will be disposed in the landfill. Considering the location of the landfill, robust design and the operational measures that will be put in place, the mixing of this small quantity is not expected to result in any significant risk for environment or human health. Road traffic safety impacts from the use of communal access roads will need to be assessed. There are no residential buildings within 500m of the proposed landfills. There are a number of cultivated fields and a fish pond located within the boundaries of the statuary Sanitary Protection Zones of the proposed landfills and such activities will be prohibited when the landfills enter operation. A  Livelihood Restoration Framework  is under development as part of the ESA and a Livelihood Restoration Plan will need to be implemented by the Client when final SPZ is defined, which will include air dispersion modelling, and the extent of impacts is fully defined.  One of the proposed landfill sites is also located in the vicinity of the Important Bird Area; therefore  a field biodiversity survey will need to be conducted to identify potential impacts, for example an increased number of predator birds, noise, etc. and develop required mitigation measures, which may potentially include seasonal restrictions to the construction, installation of the acoustic barriers, etc. Stakeholders of the project and potentially affected people will need to be consulted and a Stakeholder Engagement Plan is under development which will identify the appropriate timing frequency and modality of engagement. The draft ESAP is being developed, it will need to be finalised and agreed prior to the Final Review of the Project. This PSD will be updated upon completion of the ESDD.

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").

Post-Signing TC:

Corporate Development Programme to the 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.

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

PSD last updated

02 Apr 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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