GrCF2 W2 - WALBRZYCH BUILDINGS THERMOMODE

Location:

Poland

Project number:

51556

Business sector:

Municipal and environmental infrastructure

Notice type:

State

Approval date:

21 Oct 2020

Status:

Concept Reviewed

PSD disclosed:

07 Jul 2020

Project Description

Provision of a loan of up to PLN 138.6 million (approx. EUR 30.8 million) to refinance the retrofit and thermo-modernisation of existing municipal buildings in the city of Walbrzych converting the heat source from coal to either heating pumps or gas heating. The project is expected to bring significant energy efficiency improvement in the city's building stock.  In addition to this project, the Bank is also working with Walbrzych to finance an urban regeneration bypass to improve the city's connectivity.

Project Objectives

The proposed project will be 'trigger' project for Walbrzych under the Green City Framework 2 ("GrCF2"). GrCF2 is a strategic and multi-project approach framework targeting environmental issues in selected large cities in the Bank's countries of operations. The primary goal is to achieve significant environmental improvements and promote the green transition quality within the relevant cities. These objectives are supported by the development and implementation of a specific Green City Action Plan ("GCAP") in Walbrzych, identifying and prioritising environmental challenges and ways to address them through targeted investments, services and policy instruments.

Transition Impact

Green: Thermo-modernisation of existing municipal buildings converting the heat source from coal to either heating pumps or gas heating. In addition to changing the heat source, all buildings will undergo comprehensive insulations replacement of the windows and doors and other energy efficiency improvements. The energy audits carried out for each building class to test the level of energy efficiency improvements indicate that energy savings will be in excess of 20%.

Well-governed: This "trigger project" for the city under EBRD Green Cities will support Walbrzych in developing the GCAP. The action plan to be developed will help the city identify and prioritise its environmental challenges to be addressed through long-term development goals.

Client Information

CITY OF WALBRZYCH

The city of Walbrzych is the second largest city in the Lower Silesian Voivoidship with ca. 112,000 inhabitants. It is located in southwestern Poland in the central part of the Sudeten Mountains, near the border with the Czech Republic and Germany. Its administrative borders encompass the area of 85 km2.

EBRD Finance Summary

PLN 80,550,000.00

The Bank's financing will be for the retrofit and thermo-modernisation of existing municipal buildings converting the heat source from coal to either heating pumps or gas heating and significant energy efficiency improvements.

Total Project Cost

PLN 138,600,000.00

Additionality

The Bank's additionality stems from:

Financing Structure: Long-term financing terms that are not available in the market.

Risk mitigation: The project will be the "trigger investment" for the city under EBRD Green Cities, through which the Bank will support Walbrzych in developing its GCAP. The GCAP will help the city identify and prioritise the environmental challenges to be addressed through long term development goals.

Standard-setting helping projects and clients achieve higher standards: EBRD credit, transition impact, procurement and environmental (as reflected in the GET) related requirements go beyond what commercial funding sources would require, promoting performance improvements and greater transparency. As part of the project 's conditionality, the client will be required to implement an Environmental and Social Action Plan ("ESAP") to prioritise and drive the city's investments.

Environmental and Social Summary

Categorized B (2014 ESP).  The Project, which consists of implementing energy efficiency measures in 52 pre-selected multi-storey municipal residential buildings in old parts of Walbrzych will improve the insulation and heating sources and technical standards of the buildings, resulting in improved energy efficiency and reduced emissions.

 Environmental and social due diligence ("ESDD") comprised of an audit carried out by independent consultants and included a site visit by the Bank's environmental and social ("E&S") specialists. The findings of the ESDD were that the Municipality has some elements of environmental and social management in place, follows national legislation and that the project is generally structured to meet EBRD's Performance Requirements. The consulting team are in the process of finalising a disclosure package that will include a Non-Technical Summary ("NTS"), Stakeholder Engagement Plan ("SEP") and a Remedial Action Plan ("RAP") to address temporary resettlement of residents that will be disclosed prior to signing.

 It was determined that a national Environmental Impact Assessment was not required for this Project under national or municipal law. A Construction Phase Environmental, Health, Safety and Social Management Plan will be developed and implemented by the Contractors. The Company will be required to review and approve the Construction Environmental Management Plan ("CEMP") prior to the start of construction. The CEMP will include construction health and safety, construction environmental controls, plans for community health and safety, and emergency preparedness and response plans.

 Overall the Municipal Buildings Administration ("MBA") is addressing environmental and social issues, in line with national legislation. The Municipality does not have a formal E&S Policy, nor operate an Environmental, Health, Safety and Social Management System. Currently, environmental and social aspects are managed by MBA on ad-hoc basis, but no shortcomings was identified during the audit. Labour conditions during construction works will be the responsibility of the contractors (supervised by the MBA inspectors and State Labour Administration).

 Resource efficiency and pollution control is not expected to be an issue. It was confirmed that no asbestos containing materials are present in the buildings. The thermal insulation will be achieved by cladding of external walls with suitably fire-rated materials (expanded polystyrene), as prescribed to national standards. The Project will result in an estimated  average annual savings of 60%, which corresponds to carbon emission reduction of  4 700 tCO2e per annum.

 As part of preparation for tendering the works, MBA will conduct bird and bat monitoring at the buildings. Should any protected species be found, appropriate organisation of construction works will be adopted to avoid disturbance.

 Families occupying dwellings in the renovated buildings will be offered alternate, temporary accommodations in other municipal buildings that offer superior or similar conditions. At the end of the renovations, they will have an option to either return to their original dwelling or remain permanently in accommodations provided during the renovations. A RAP has been prepared to assess the approach to resettlement against EBRD requirements and national law. This assessment found that the resettlement approach is largely in line with these requirements. The RAP includes measures to address any gaps including in grievance management and monitoring. These buildings are not listed as protected in national law, although are included in local registers. Heritage Administration opinions were obtained as applicable. 

 A SEP is being developed. It includes engagement with the residents' representatives, consultation with business owners, and a community grievance mechanism. A grievance mechanism is currently in place. To date, no grievances have been recorded with respect to thermomodernisation of the buildings.

 An Environmental and Social Action Plan ("ESAP") has been developed for the project and will be agreed with client prior to signing. It includes the requirement to develop Environment and Social as well as Health & Safety Policies and management  systems; prepare and implement a Construction EHS Management Plan; develop and implement a worker grievance mechanism; implement appropriate measures for asbestos management if any is found; calculate CO2 emissions reductions; have the design engineer prepare a fire safety report; conduct monitoring of birds and bats; and implement the project Stakeholder Engagement Plan. The Bank will monitor the project through annual environmental and social reports provided by the Client, and site visits if necessary. 

Technical Cooperation and Grant Financing

TC: Green City Action Plan: to assist the City with developing a GCAP to prioritise investments in the City of Walbrzych in pursuit of the green agenda. The cost estimate is EUR 0.3 million proposed to be financed by Poland and Taipei China.

Company Contact Information

Mr Kacper Nogajczyk
nogajczyk-k@mzbwalbrzych.pl
+48 696 488 683
+48 74 847 747 7
https://www.mzbwalbrzych.pl/
Miejski Zarząd Budynków Spółka z o.o. ul. Generała Andersa 48 58-304 Wałbrzych

PSD last updated

17 Sep 2020

Understanding Transition

Further information regarding the EBRD’s approach to measuring transition impact is available here.

Business opportunities

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General enquiries

Specific enquiries can be made using the EBRD Enquiries form.

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 how to submit a Request for review through our confidential online form, by emailmail or telephone. IPAM is available to discuss your concerns and answer any questions you may have about the submission or handling of Requests, which follow the Project Accountability Policy and Guidance. Requesters’ identities may be kept confidential, upon request.

 

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