GrCF2 W2 - Banja Luka Water - Phase 1

Location:

Bosnia and Herzegovina

Project number:

51214

Business sector:

Municipal and environmental infrastructure

Notice type:

Public

Environmental category:

B

Approval date:

03 Sep 2019

Status:

Disbursing

PSD disclosed:

20 Sep 2019

Translated version of this PSD: Bosnian

Project Description

Provision of a non-sovereign loan to the city of Banja Luka (the "city") for the rehabilitation and expansion of Banja Luka's existing water supply network (the "project").

Project Objectives

Assisting the Banja Luka Water Company ("Vodovod a.d. Banja Luka" or the "Company") to: (i) improve its performance through the reduction of costs; (ii) reduce consumption of electricity and (iii) provide a reliable supply of potable water to its customers.

Transition Impact

Good.

The expected transition impact includes: (i) improvement of the quality and reliability of water supply and (ii) improvement of the company's financial sustainability and operational efficiency by entering into a public service contract ("PSC") between the city and the company.

Client Information

CITY OF BANJA LUKA

The City is the, economic, financial, political and administrative centre of the Republika Sprska ("RS"), which is one of the two political entities that make up Bosnia and Herzegovina ("BiH"). The City has a population of 199,191 people (based on the results of the 2013 census).

EBRD Finance Summary

EUR 4,000,000

Total Project Cost

EUR 4,000,000

Environmental and Social Summary

Categorised B (2014 ESP). The Phase 1 project, through the rehabilitation and expansion of the existing water network infrastructure in the City will improve the quality, safety and reliability of the drinking water supply for 10,380 customers of which 6,850 are new users.

An independent Environmental and Social due diligence ("ESDD") was undertaken by external consultants as part of the feasibility study prepared for the Project and confirmed that the quality of the drinking water supply provided under Priority Investment Plan ("PIP") will meet relevant national and EU requirements.

The Company has an ISO 14001 certified Environmental Management System and also HACCP certificate for production and water distribution, benchmarking its practices with other water utilities in the Danube river catchment area. However, the Company has no established Occupational Health and Safety ("OHS") Management System yet and will need to further improve its OHS practices. There are 365 employees, with over 25 per cent women, and associated human resources ("HR") policies and procedures in place are mostly aligned with PR2. There is designated staff responsible for environmental and OHS management, and the Company currently has all necessary permits in place for its operations. The Company carries out stakeholder engagement activities, including a grievance mechanism, in connection with the planning and construction of its infrastructure.

No significant adverse impacts were identified by the external ESDD, and any impacts will be mostly construction-related, temporary by nature, and will be mitigated through good EHS construction practice. The new pipelines will also in the majority of their length follow the existing roads. The ESDD confirmed that the PIP components will not affect any sensitive or designated nature conservation areas, however precautionary biodiversity measures including a pre-construction biodiversity assessment will be conducted once the design documentation is completed and the final alignments for the networks are defined.

The Project will not involve any involuntary resettlement, and no buildings would be affected. A Land Acquisition and Resettlement Framework ("LARF"), including the compensation matrix covering all categories of the project affected people ("PAPs"), has been prepared in line with PR5 and a detailed LARP will be developed based on the LARF. A Stakeholder Engagement Plan ("SEP"), including a grievance mechanism, has also been prepared for the Project.

The Environmental and Social Action Plan ("ESAP") has been prepared and provisionally agreed with the Company and the City to mitigate the identified E&S issues and impacts and to bring the Company's operations into compliance with the EBRD's PRs. The ESAP includes among others measures to be taken by  the Company to: (i) ensure completion of any additional environmental and/or biodiversity studies that may be required by the competent environmental authorities for the project components in order to obtain the relevant environmental and construction permits;  (ii) include in contractors contracts an obligation to develop and implement construction EHS Management Plan and apply good working practices during construction; (iii) inform all residents in a timely manner about expected construction impacts and anticipated mitigation measures; (iv) finalise and disclose LARF and SEP, including external grievance mechanism; (v) following from LARF, develop and implement a detailed LARP; (vi) develop and implement an OHS Management System. The Company will implement the corrective ESAP, and the Bank will monitor the project through review of Annual Environmental and Social Reports ("AESRs") and site visits as required.

Technical Cooperation

The Project includes the following technical cooperation programmes:

(i) Technical and Environmental and Social due diligence.
(ii) Advance Procurement Support;
(iii) Project Implementation Support;
(iv) Financial and Operational Performance Improvement Programme ("FOPIP").

Company Contact Information

Sinisa Kurtes
kabinet.gradonacelnika@banjaluka.rs.ba
00387 51 244 444
00387 51 212 526
www.banjaluka.rs.ba
Trg Srpskih Vladara 1 78000 Banja Luka Bosnia and Herzegovina

Business opportunities

For business opportunities or procurement, contact the client company.

For state-sector projects, visit EBRD Procurement: Tel: +44 20 7338 6794
Email: procurement@ebrd.com

General enquiries

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Email: projectenquiries@ebrd.com

Public Information Policy (PIP)

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Text of the PIP

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