Provision of a senior loan of up to EUR 5 million to the municipality of Prizren (the "city" or "Prizren"), structured as a direct municipal obligation to the city to co-finance energy efficiency ("EE") measures in municipally owned buildings, including kindergartens, schools, and primary healthcare centres (the "project").
The project will be co-financed with an investment grant from the Regional Energy Efficiency Programme for the Western Balkans ("REEP") funded by the European Union.
- Improvement of the environmental sustainability of municipally-owned buildings in Prizren by implementing EE measures that will lead to energy savings and reduction in CO2 emissions.
- Improvement of the energy performance of the renovated buildings by at least two Energy Performance Certificate ("EPC") classes.
- Improvement of comfort levels and quality in the renovated buildings, which is very important for buildings of this nature (children and healthcare).
ETI score: 65
The primary goal of the project is to achieve significant environmental improvements and promote the green economy transition ("GET") within the city. The project will introduce high quality, innovative EE technologies in buildings that will have a strong demonstration effect and support the "renovation wave" in buildings across the country and the region. Moreover, the financing structure of the loan as the first direct borrowing by the city, and the second sub-sovereign public sector project in Kosovo promotes the resilient transition quality by expanding the range of available financing instruments.
CITY OF PRIZREN
Prizren is the second largest municipality in Kosovo and the regional centre of southwest Kosovo with a population of approximately 180.000.
EBRD Finance Summary
A sub-sovereign loan of up to EUR 5 million.
Total Project Cost
The total estimated project cost is approximately EUR 7.5 million including Technical Assistance.
- Financing Structure - The EBRD will provide the first direct loan to the city and this is the second sub-sovereing public sector project in Kosovo.
- Risk Mitigation - The proposed investment will result in energy savings and lower GHC emission, thereby reducing both non-financial and carbon transition risks.
- Standard Setting - Technical Assistance and loan conditionalities will support capacity building.
Environmental and Social Summary
Categorised B (2019 ESP). This project will have significant benefits related to high quality energy efficiency measures, including improvement to building insulation and replacement of old heating sources, resulting in improved energy efficiency and reduced emissions in public buildings in the city of Prizren. Environmental and social due diligence (ESDD) was comprised of an audit carried out by an independent consultant and included site visit to 11 selected buildings. The findings of the ESDD were that the Municipality has some limited elements of environmental and social management in place and is generally in compliance with national legislation. The ESAP has been prepared and agreed with the Municipality.
The Project consists of implementing energy efficiency (EE), structural and comfort measures in up to 100 municipally owned buildings, such as kindergartens, schools, and primary healthcare centres. The EE measures will generate around 59% annual energy savings and 48% annual avoided CO2 emissions (equivalent of 275 tonnes of CO2 emission per year). Technical and E&S DD findings showed that for some buildings, the water supplied does not meet drinking water standards, the sites are not connected to the sewage system and some schools are not equipped with proper toilets. Essential structural and comfort measures have therefore been added to the project scope; they include improvement of damaged structures, sewage/drainage systems, waterproofing, asbestos removal, sanitary rooms, etc. The Municipality does not have an E&S Policy, nor operate an Environmental, Health, Safety and Social (EHSS) Management System. The ESAP requires the client to assign responsibility for EHSS management at the Project Implementation Unit and to appoint a certified EHS Manager full time within the Municipality.
A Construction Phase Environmental, Health, Safety and Social Management Plan (CESMP) will be developed and implemented by the Contractor, and approved by the Municipality prior to start of construction. The ESAP requires the Municipality to ensure that in every Project building, i) building users have access to drinking water, ii) building users have access to toilets located within the building and equipped with flushing water, iii) domestic wastewater is collected and treated before discharge to natural environment.
All the contracts are in line with Law on Labour. The Municipality staff is covered by a Collective Labour General Agreement and a high percentage of employees are members of a Trade Union. There is currently no planned major programme of retrenchment across the Municipality. Most of the buildings are heated by central modern pellet boilers or firewood boilers of modern technology (or electricity); for the project-related buildings heated by non-certified individual firewood stoves, the ESAP requires replacement by a less air polluting heating system. Occupational H&S issues at the majority of the sites visited during ESDD need improved management; operational corrective actions have been captured in the ESAP. The ESAP also requires to conduct an intrusive asbestos survey and, where asbestos has been identified, to implement necessary measures to reduce the risks of exposure to asbestos fibres. Asbestos surveys will be conducted together with the Energy Audits in each Project building, and the implementation of an Asbestos Management Plan has been covenanted. The thermal insulation of walls and roofs will be suitably fire-rated by the Supplier, as prescribed in national standards. The ESAP requires that the design engineer submit a fire safety report to the Municipality, and that operational H&S issues are addressed after the end of the works (fire extinguishers, fire safety doors, etc.). All the buildings are owned and managed by the Municipality, however in some cases the land parcels are contested by private owners. The ESAP requires the Municipality to obtain the missing land titles. None of the Project building is on the list of buildings which are under protection of UNESCO or national law (as confirmed by a provision in the Loan Agreement). The Municipality maintains its own official webpage. An online grievance mechanism is already in place. A Stakeholder Engagement Plan (SEP) has been developed during the ESDD; the Municipality will notify in advance the building users about the planned reconstruction activities including alternative access to disrupted services (e.g. patients to be sent to other health care locations temporarily).
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
- Feasibility Study of the Project
- Environmental and Social Due Diligence
- Project Implementation Support
Company Contact Information
PSD last updated
29 Mar 2021
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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.
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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.
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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.
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