Project Description
A senior unsecured loan of up to EUR 70.0 million to Bursa Water and Sewage Administration ("BUSKI" or the "Company") to finance the construction of a c.67-km long water transmission line, a drinking water treatment plant (DWTP) with a capacity of 300,000 m3/day and ancillary structures (the "Project"). The loan will be co-financed by a concessional loan of up to EUR 5.0 million from The Clean Technology Fund ("CTF").
Project Objectives
The Project will provide healthy and safe drinking water for the growing population and industrial needs in the City of Bursa and contribute to a more sustainable and energy efficient water resource mix by substituting the extensive use of underground well water sources with surface water, which is expected to reduce energy consumption.
Transition Impact
ETI score: 70
The Project will primarily help to promote the Green transition quality by improving reliability and quality of critical drinking water services to a population of 2.4 million and paving the way for the projected increase in the City's population until 2050. The Project will reduce energy intensity in the water supply network and lead to reductions of GHG emissions by replacing currently pumped groundwater sources with surface water sources fed by gravity. In addition to increasing the efficiency of the system, the Project will also help to conserve remaining groundwater supplies and preserve its quality by switching to a more sustainable and climate resilient surface water resource. From a physical resilience perspective, it reduces the risk of irreversible aquifer depletion through over-abstraction for those users remaining dependent upon these water resources. Therefore, the Project is eligible for EBRD Green Cities satisfying the criteria for both mitigation and adaptation sub-projects simultaneously and qualifies as 100 pericent GET. The Project will serve as a trigger project for the City of Bursa initiating the development of Bursa Green City Action Plan (GCAP), which will identify and prioritise the investments and policy actions needed to address the City's most pressing environmental challenges.
The Project will also contribute the Inclusive transition quality by supporting the Company to address its gender gaps through a dedicated Equal Opportunities Action Plan (EOAP). The plan will address key gaps identified as part of the Project's Gender Analysis including (i) unavailability of an institutional policy, strategy, or action plan for gender equality, (ii) low employment rate for women in technical positions, and (iii) underrepresentation of women in management. The EOAP will be developed under a dedicated TC component to be developed jointly by the Bank and AFD. The Bank will collaborate with AFD to develop the scope of the assignment; provide technical support and monitor the performance. The plan will support the Company to increase the share of women in its workforce with the goal of reaching the OECD average (21%). In addition, the TC will support the Company to establish systems and procedures to collect and operationalize sex-disaggregated data at the user level. Utilization of sex-disaggregated data will help the Company to better design and render its services to the most vulnerable such as single mothers.
Client Information
BURSA WATER AND SEWAGE ADMINISTRATION
Bursa Water and Sewage Administration, an affiliated entity of Bursa Metropolitan Municipality, is a public utility with 1.4 million subscribers, covering a population of 3.1 million and a service area of c. 11,000 km2.
EBRD Finance Summary
EUR 70,000,000.00
Total Project Cost
EUR 150,000,000.00
Additionality
The Bank's additionality derives from (i) financing structure given the limited available funding sources in the market from commercial sources on reasonable terms and conditions, (ii) helping projects and clients achieve higher standards as well as knowledge, innovation and capacity building, including the climate risk mitigation and higher environmental standards.
The EBRD will provide expertise, innovation, knowledge and capabilities that are material to the timely realization of the project's objectives.
Environmental and Social Summary
Categorised B (2019 ESP). Environmental and social due diligence ("ESDD") of the proposed investment was undertaken by TC funded consultants as part of the Feasibility Study.
An Environmental and Social (E&S) Assessment has been carried as part of the technical and financial affordability assessment of the Project and consisted of a revision of the relevant project documentation and communications with relevant authorities, as well as a review of the Company's E&S management systems and capabilities to implement the Project in line with the EBRD PRs during implementation and operation, legal compliance with EU standards for drinking water quality and national permitting procedures.
The potential impacts addressed based on the E&S assessment report involve the pre-construction, construction, operation, and decommissioning phases of the project, as well as the cumulative impact, while any potential residual environmental and social impacts were assessed. No EIA was required for the project under the national legislation. E&S Assessment concluded that the Company has the institutional capacity to implement the project in compliance with the Bank's PRs and with national legislation. The Company is planning also to establish a PIU. E&S Assessment also concluded that any adverse environmental and social impacts of the project will be site-specific, mainly restricted to the construction phase. These include: dust emission arising from vehicles movements and excavation/drilling activities; air pollution due to gas emissions from construction vehicle; noise impacts; minor land use and temporary agricultural impacts due to expropriation; temporary closure of roads due to construction activities and alternative routes for the traffic flow; temporary interruptions in water supply, which will be addressed through appropriate mitigation measures.
The Project area is not located within a national protected area (national park, special environmental protection area, wildlife protection area etc.). The closest protected areas are Uluabat Lake - an international protected area that is a Ramsar site and a Key Biodiversity Area. Uluabat Lake is located approximately 2.2 km northwest of the Hydroelectric Station where the water intake structures in scope of the Project will be constructed. The Project route is located approximately 10 km northwest of Uludai Mountain, which is a National Park.
The project will enhance sustainability of the Bursa city's drinking water system by providing additional water of 75 Mm3/yr while providing 70 Mm3/yr of industrial water. The two components of the project: pipelines and water treatment plant will guarantee the drinking water security and safety until mid-2030s. The due diligence report shows that the risk is material and the analyses reveal that the increased temperature in the region causes increased evapotranspiration and reduced streamflow as well as reservoir water yield. Analyses of historical precipitation series showed that there have been multiple years with drought periods and the frequency and severity of droughts may exacerbate with the climate change. The Project helps Bursa region and the Susurluk basin by connecting the residents to an additional water supply system. Moreover, it will allow the aquifer to regenerate, making it a backup resource for instances of acute, surface-level water droughts.
An Environmental Social Action Plan ("ESAP") has been developed, and will be agreed with the Company before Board. Draft ESAP includes requirements to: update the organization set-up in order to accommodate the project investment unit; update the environmental and social policies to accommodate new strategic developments and ensure that the policy is communicated to employees; monitor contractors to ensure that they fulfil their environmental and social obligations during the construction phase; relevant E&S management plans to comply with performance requirements will be developed and implemented; carry a preconstruction survey visit the Project site and determine a list of flora and fauna species in the Project area with their protection status and develop a Biodiversity Management Plan, if needed; develop and implement a worker and contractor Grievance Mechanism; implement the SEP including grievance management for external stakeholders and update annually; ensure that priority is given, and resources allocated to implement stakeholder engagement and communication activities during the construction activities. Monitoring of the project and ESAP implementation will be carried out via annual environmental and social reports provided by the Company.
Technical Cooperation and Grant Financing
Pre-signing:
TC 1 - Technical, Financial, Environmental, and Social Due Diligence including Gender Analysis: The estimated cost of the assignment is EUR 350,000 and is financed by CTF.
TC 2 - Advance Procurement Support: Consultancy support to the Company for the contracts proposed for financing by the EBRD, including (i) review of the design documents and technical specifications, (ii) preparation of the tender documentation and (iii) management of procurement process up to the contract/s award, to ensure compliance with the EBRD Procurement Policy and Rules ("PP&Rs"). The estimated cost of the assignment is EUR 74,766 and is financed by CTF.
Post-signing:
TC 3 - Green City Action Plan (GCAP): Consultancy to assist the City with the development of a GCAP in order to identify and prioritize its most pressing environmental challenges, and support the development and implementation of a plan outlining investments and policy actions for the city of Bursa. The GCAP will also cover digital, as well as inclusion and gender considerations in a dedicated assessment. The expected cost of the assignment is EUR 350,000 and will be financed by CTF.
TC 4 - Monitoring and Implementation Support: Project monitoring and implementation support to the Company to include support in the loan reporting requirements, including ESAP. The estimated cost of the assignment is EUR 249,950 and will be financed by CTF.
Company Contact Information
Nigar Etik
netik@buski.gov.tr
+90 (224) 270 25 47
www.buski.gov.tr
Sirameseler Mahallesi Avrupa Konseyi Bulvari No: 6/3 D Blok
16190 Osmangazi / Bursa - Turkey
PSD last updated
10 Mar 2023
Understanding Transition
Further information regarding the EBRD’s approach to measuring transition impact is available here.
Business opportunities
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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.
