Loan of up to EUR 20 million to Compania de Apa Buzau, the regional water operator in the County of Buzau.
The proceeds of the loan will be used to co-finance alongside EU Cohesion Funds an extension and modernisation of the company's water and wastewater infrastructure and services. The EU investment grants are being made available under the EU Large Infrastructure Operational Programme.
The project aims to enable Compania de Apa Buzau to bring their water and wastewater services in line with EU environmental standards by co-financing the extension and rehabilitation of the company's water and wastewater network alongside the EU.
ETI score: 60
The Project is proposed for financing under the Sustainable Water Infrastructure Facility Framework ("SWIFT"). In line with SWIFT, the transition impact of the project will be achieved through:
- The development of a long term asset management approach.
- The support of environmental improvements and continued regionalisation of water and wastewater services in the County of Buzau.
WATER COMPANY OF THE CITY OF BUZAU
SC Compania de Apa SA
EBRD Finance Summary
Total Project Cost
Long term financing from commercial banks for this type of infrastructure projects is not widely available in Romania at present. In addition, the Bank's long standing experience in the Romanian water sector and unique ability to structure an AMP, define options for cost-efficiency improvements, and improve delegation contracts to ensure sustainability of the project make the Bank highly additional in this transaction and best placed to pursue the reform agenda.
Environmental and Social Summary
Categorised B (2014 ESP). The Environmental and Social Due Diligence (the "ESDD") for the Project has been carried out as part of the Project Feasibility Study by independent consultants and included a review of Environmental and Social (E&S) management capacity and performance of S.C. Compania de Apa Buzau S.A. (CA Buzau) and an assessment of the project's potential E&S impacts.
CA BUZAU operates an integrated management system and is certified to ISO 14001, OHSAS 18001 and ISO 22000. The company's Human Resources systems are in full compliance with the requirements of PR2.
The total population benefiting from improved water supply and wastewater services, enabled by the project, amounts to 210,827 and 175,397 inhabitants respectively. There will be increased connection rates to water supply networks from current level of 91 per cent to 96 per cent across the network or 93.3 per cent to 98.7 per cent in the project area. There will be increased connections to wastewater networks from current level of 65 per cent to 84 per cent across the network or 73.7 per cent to 96.7 per cent in the project area thereby greatly reducing the discharge of untreated sewage. The company has committed to provide additional funds to ensure 100 per cent connection rates. There will be a particular focus on improving connections to small localities (below 10,000 inhabitants). In addition, upgrades to infrastructure will reduce water losses from 31 per cent to 24 per cent of supply in the CA Buzau's service area. These measures will bring the company into compliance with the service provision obligations of the EU Directive no. 98/83/EC on the quality of drinking water and Directive no. 91/271/EEC on wastewater collection and treatment by 2024. The project will also enable compliance with EU Directive no. 86/278/EEC on sewage sludge. Due diligence has confirmed the sustainability of the water resources.
The environmental and social appraisal demonstrated that the environmental and social impacts of the proposed upgrading and expanding water supply and wastewater systems will be mainly of limited duration and extent and can be mitigated through standard methods and good construction practices. The project was subject to a single EIA Screening procedure. The competent authority issued the screening decision that neither a full EIA nor full-scale appropriate assessment is required due to the project being unlikely to have a significant impact. A limited part of the project will be conducted within or in close proximity to Natura 2000 sites (ROSPA0160, ROSPA0160, ROSPA0141 and ROSCI01999). The evaluation of the impact on the Natura 2000 sites in the project area is assessed in the presentation memorandum which concluded no potentially significant impact is expected on the functions of the species and habitats of community interest, or the populations, during construction on the Natura 2000 sites. The temporary impact related to noise that may disturb the fauna is reduced through mitigation measures, and the overall impact is not significant. It is assessed that the project is in full compliance with EU Directive no. 79/409/EEC on the protection of wild birds and EU Directive no. 92/43/EEC on the conservation of natural habitats and of wild fauna and flora; and overall, the project is assessed to have a positive impact on the Natura 2000 sites through the reduction of unplanned wastewater discharges into aquatic ecosystems.
The ESDD has concluded that the environmental impacts of the project have been assessed in full compliance with the new EU EIA Directive. All environmental approvals (EAs) including the final screening decision have been obtained for the investment project based on the final design. There were no comments or complaints received to date from the public during the public comment period or anytime during the procedure.
There will not be any involuntary resettlement of formal settlements, or expropriation, or any known use of currently occupied land.
The consultants have prepared a Stakeholder Engagement Plan ("SEP") and Environmental and Social Action ("ESAP"), which will need to be agreed with the client prior to the EBRD's board approval. The Environmental and Social Action Plan (ESAP), which among others includes obtaining final environmental approvals for the EIA and the AA; updating of E&S management system plans and procedures; development and implementation of construction E&S management plans (including biodiversity management of Natura 2000 areas); contractor management and monitoring; temporary use of land and possible economic displacements; development of chance find procedure; and implementation of the Stakeholder Engagement Plan.
The Environmental and Social Department will monitor the project and implementation of the SEP and ESAP through annual reports provided by the client.
Technical Cooperation and Grant Financing
The EBRD will mobilise funds from donors to support technical cooperation.
The Project benefited from pre-signing assignments included under SWIFT: technical and procurement review, environmental and social gap analysis, operational and financial due diligence of Apavital, legal and institutional due diligence on regionalisation. The amount of these assignments was EUR 102,000 and has been financed by the Bank's Infrastructure Project Preparation Facility.
In addition, the project will benefit of post-signing TCs:
Up to EUR 50,000 to be financed from the sector TC under the Memorandum of Understanding with Romania for the participation of the company in a national water sector programme including: strategic options for the development of the sector (water sector policy), new ways of financing, revised tariff methodology, asset management plans, benchmarking, training and capacity building.
Company Contact Information
PSD last updated
26 Feb 2020
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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 email@example.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 firstname.lastname@example.org to get guidance and more information on IPAM and how to submit a request.