Belarus Environmental Infrastructure Facility

Location:

Belarus

Project number:

41417

Business sector:

Municipal and environmental infrastructure

Notice type:

Public

Environmental category:

B

Approval date:

27 Mar 2012

Status:

Board Approved

PSD disclosed:

11 Apr 2011

Translated version of this PSD: Russian

Project Description

The EBRD is considering launching the Belarus Environmental Infrastructure Framework Facility (BEIFF) with the Republic of Belarus. The Facility is intended to provide total external financing of up to €27.2 million for up to three secondary municipalities to improve environmental infrastructure and services.

Sub – project Vitebsk Waste Water:

The project comprises a sovereign loan of €12.5 million to be on-lent to the Vitebsk Water Company.

The proceeds will be used to improve the existing wastewater treatment plant and sludge handling facilities. The main investment components are envisaged to include: installation of new overflow weirs; construction of pumping stations, aeration tanks, a distribution chamber and a pressure line; installation of new control equipment, pumps and screens; and, the acquisition of flushing and closed circuit television scanning equipment.

The objective of the project is to make investments to improve the water quality of the Zapadnaya Dvina / Daugava River, the Gulf of Riga and the Baltic Sea.

In particular, these investments would aim to reduce the phosphorus and nitrogen content of the treated effluent discharges plus reduce the risk of mechanical breakdown. This will help Belarus to comply with HELCOM recommendations and meet the strict Belarusian and EU effluent quality standards. The investments will also reduce energy consumption and CO2 emissions.

Sub – project SlonimBiogas:

The Project comprise a sovereign loan of €2.85 million to be on-lent to the Slonim Water Company.

The objectives of projects is – constructing biogas generation and utilization plant, that would allow usage of wastewater sludge at the treatment plant for the production of biogas and its exploitation in the thermal energy cycle of the company will continually work to save energy, reducing greenhouse gases and volume of sludge at the same time. The project will remove the ongoing need for sludge drying beds, which are a potential source of groundwater pollution.

Sub – project Baranovichi Biogas:

The projects comprises a sovereign loan of €2.9 million to be on-lent to the Baranovichi Water Company.

The objectives of projects is – constructing biogas generation and utilization plant, that would allow usage of wastewater sludge at the treatment plant for the production of biogas and its exploitation in the thermal energy cycle of the company will continually work to save energy, reducing greenhouse gases and volume of sludge at the same time. The project will remove the ongoing need for sludge drying beds, which are a potential source of groundwater pollution.

Transition Impact

Transition impact will come from:

  • Operational improvement, commercialisation and business plans
    The Bank will help the Company to improve overall utility management, financial management and reduce operational costs
  • Improved tariff structure and cost recovery
    A medium term objective will be to achieve full cost recovery and eliminate cross-subsidies in a staged approach.
  • Setting standards for environmental management and business conduct
    The project would be the first co-operation between the EBRD and the Government of Belarus in the wastewater treatment sector and would set an example for better environmental management at the municipal level, bringing effluent quality to meet Belarusian and EU standards. The project is expected to have a demonstration effect on other localities in Belarus.

The Client

Sovereign loan to the Republic of Belarus with on-lending to the relevant water company at sub-project level as the ultimate beneficiary of the project.

  • Vitebsk sub-project: Vitebsk Water Company
  • Slonim sub-project: Slonim Water Company
  • Baranovichi sub-project: Baranovichi water company

EBRD Finance

€18.25 million loan facility for the entire Framework, co-financed by capital expenditure from various multilateral or bilateral donors.

  • Vitebsk sub-project: an EBRD loan of €12.5 million co-financed by a €2.0 million capital expenditure grant provided by the Northern Dimension Environment Partnership, and €2.7 million from Swedish International Development Co-operation Agency
  • Slonim sub-project: an EBRD loan of €2.85 million co-financed by a €1.4 million capital expenditure grant provided by Swedish International Development Co-operation Agency
  • Baranovichi sub-project: an EBRD loan of €2.9 million co-financed by a €1.4 million capital expenditure grant provided by Swedish International Development Co-operation Agency

Project Cost

€27.2 million (net of taxes) is the estimated capital expenditure and technical cooperation cost for the entire Framework.

  • Vitebsk sub-project: The capital expenditure (net of taxes) is estimated at EUR 18 million.
  • Slonim sub-project: The capital expenditure and technical cooperatoin (net of taxes) is estimated at EUR 4.6 million.
  • Baranovichi sub-project: The capital expenditure (net of taxes) is estimated at €4.6 million.

Environmental Impact

All three sub-projects to be financed by the EBRD have been categorised “B” under the 2008 Environmental and Social Policy. Environmental and social due diligence (ESDD) has been carried out by the Bank and independent consultants and consisted of site visits, environmental and social (E&S) audit/review of the Participating Utilities’ existing corporate management systems, facilities and operations, analysis of the E&S impacts and benefits of the Priority Investment Programmes (PIPs) to be financed by the Bank. The due diligence concluded that for all three localities the standards for urban wastewater treatment and sludge management/disposal practices will improve substantially, and that the projects have been structured to comply with relevant EBRD Performance Requirements (PRs).

The ESDD showed that the operation will entail significant environmental and social benefits. All three projects will contribute to improving the quality of the local environment and public health and water quality in the Baltic Sea catchment area. The implementation of the PIP in Vitebsk will improve efficiency and quality of wastewater treatment in the City thereby improving the quality of the biological treatment and reducing pollution from nutrient discharges, improving the water quality in Zapadnaya Dvina / Daugava river as well as further downstream in the Gulf of Riga and the Baltic Sea. The WWTP rehabilitation will involve introduction of nutrient removal of nitrogen (N) and phosphorus (P), bringing quality of treated effluent in compliance with the national and EU requirements and closer to HELCOM recommendations. In addition, the project will improve occupational health and safety conditions.

The implementation of PIPs in Baranovichi and Slonim will enable heat and electricity generation from sludge biogas and improving efficiency of the sludge management in these two cities thus preventing release of methane greenhouse gas into the atmosphere, reducing air pollution, soil and groundwater contamination and minimising odours. By implementation of the state-of-the-art sludge treatment technology, compliance with national and EU requirements for sludge management can be achieved in both cities. Both sludge biogas projects will also reduce the volume and improve the quality of sludge to be disposed of. In both Baranovichi and Slonim the treated effluents are currently compliant with national norms, and the PIP will help to achieve a 50 per cent reduction of N and P through modification of the aeration tanks in an effort to move closer to EU standards and HELCOM recommendations. Additional small-scale investments in P removal are included in the Environmental and Social Action Plan (ESAP) for both cities so as to meet EU standard and HELCOM recommendation for phosphorus removal by 2016.

The implementation of the PIP involves construction works that will result in limited, localised and short-term adverse environmental impacts, which can be mitigated or prevented by adhering to good construction practice. These requirements as well as some additional corrective measures on wastewater treatment and sludge management have also been included into the ESAPs. The planned tariff increases are expected to affect the lower income households, however, the associated grant components and subsidies will mitigate and address affordability constraints.

The due diligence showed that the Participating Utilities have some capabilities in Environmental, Health and Safety Management, however their current occupational health and safety and stakeholder engagement practices require further improvement to meet compliance with EBRD PRs. ESAPs have been developed to bring the Participating Utilities into compliance with national regulations and EBRD's PRs. ESAPs include improvements to the companies’ EHSS (environmental, health and safety and social) management systems and procedures, occupational health and safety (OHS) related measures for own staff and the contractors, improvements to the labour and working conditions, fire and emergency response procedures. Draft Stakeholder Engagement Plans (SEPs) for each Participating Utility's PIP have been prepared. Participating Utilities will be required to finalise and implement the SEPs prior to any construction taking place. E&S considerations have also been incorporated into the associated technical cooperation projects to help Participating Utilities build their EHSS capacity and implement the ESAPs.

The E&S performance and the implementation of the ESAP and SEP by each Participating Utility will be monitored through annual E&S reports. The Bank will commission a completion audit for the three sub-projects and may also undertake monitoring visits, as required.

Technical Cooperation

Project Preparation

  • Feasibility studies were completed to assist the Bank in the financial, technical, legal, environmental and social due diligence of the projects and to prepare them for financing. (€245,000 for Vitebsk; €295,000 for Slonim and Baranovici). Both assignments were financed by the Government of Austria.

Project Implementation

  • Belarus - MEI Framework Facility - Project Management Support including Detailed Design, Procurement and Engineering Supervision. International consultants will provide the Companies with detailed design, engineering supervision, tender evaluation, contract award and administration, financial control, project management, and reporting services for the four year implementation period. €2.3 million – funded by the Swedish International Development Co-operation Agency on an untied basis. The assignment covers support for the five projects initially covered by the BEIFF – two of which are led by the NIB.
  • Belarus - MEI Framework Facility - Corporate Development and City/Regional Support Programmes for the Cities/Regions of Vitebsk, Brest, Grodno, Slonim and Baranovichi and their Water Companies.International consultants will assist the Companies to improve their commercial standing, service and environmental and social performance by helping to identify and implement the necessary corporate, financial and operational improvements required to meet the related covenants included in the loan documentation. The assignment shall also assist the Companies to develop a medium-term focused corporate development plan and to improve their corporate planning capacity to assist ongoing transition towards becoming self-sustaining entities and commercial operators.

Additionally, support shall be provided to the Cities/Regions to implement Project Support Agreements, which will be key components of the financial structure for the proposed sub-projects as well as raising institutional capacities within the Cities/Regions to assist them in managing the sub-projects in an effective manner through better financial planning thereby improving their creditworthiness. Additionally, the assignment shall assist the Cities/Regions in the analysis of the baseline social situation of the vulnerable sections of the population and the impact of the sub-projects on these groups, and in connection to this assess any impact of the sub-projects of the equality between men and women. €805,000 – funded by the Government of Finland on an untied basis. The assignment covers support for the five projects initially covered by the BEIFF – two of which are led by the NIB.

Reimbursement: the above TC projects are non-reimbursable.

 

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

EBRD project enquiries not related to procurement:
Tel: +44 20 7338 7168
Email: projectenquiries@ebrd.com

Public Information Policy (PIP)

The PIP 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. Please visit the Public Information Policy page below to find out how to request a Public Sector Board Report.
Text of the PIP

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 email, mail 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. Requestors’ identities may be kept confidential, upon request.

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