Belgrade Solid Waste PPP

Location:

Serbia

Project number:

46758

Business sector:

Municipal and environmental infrastructure

Notice type:

Private

Environmental category:

A

Target board date:

22 May 2019

Status:

Concept Reviewed

PSD disclosed:

20 Mar 2018

Translated version of this PSD: Serbian

Project Description

The provision of debt financing in an amount of up to EUR 90 million to Beo Cista Energija d.o.o Beograd, a limited liability company established with the sole purpose of operating and financing the Belgrade Solid Waste PPP project under a Design, Build, Finance, Operate, Transfer (DBFOT) scheme, and owned by consortium of Suez and Itochu. The operation will enable the company to finance, construct and operate landfill and facilities for treatment and disposal of collected residual municipal waste generated in thirteen municipalities of the City of Belgrade for a volume of approximately 510,000 tons/year and treatment of Construction and Demolition Waste (CDW) in a volume of approximately 200,000 tons/year generated in its territory.

Project Objectives

The project envisages construction of the Energy-from-Waste Facility (EfW), CDW Facility, remediation, closing and aftercare of the existing landfill and construction of a new landfill. The current landfill site Vinca, which has been in operation since 1977, is one of the largest landfills in Europe with coverage of 70h and is reaching its maximum capacity. Vinca is a non-sanitary landfill, without lining, gas collection and leachate treatment which creates significant environmental and health risks. The project facilities should allow the city to meet the biodegradable waste landfill diversion as well as the CDW recovery objectives set by the EU Waste Framework Directive. In addition, all facilities developed under the project will be compliant with applicable EU regulations, including the Landfill Directive and the Industrial Emissions Directive.

Transition Impact

Good.

The transition impact stems from the following two transition qualities:

1) Competitive: The project will introduce private sector involvement to the provision of solid waste management services in the city. Given current very limited involvement of the private sector, a successful transaction will constitute an example for other municipalities in the country and the region, which would benefit from similar PPP models for waste management and attract other private investments in the sector.

2) Green: The project will contribute towards the Bank's Green Economy Transition by enhancing innovation and broadening environmental dimensions of the solid waste management sector. The project will promote the sustainability of natural resources, support pollution prevention and will reduce the degradation of ecosystems. The project will be complaint with applicable EU regulations and objectives set by EU Waste Framework Directive regarding biodegradable waste
landfill diversion and CDW recovery objectives.

Client Information

The client is a newly established special purpose vehicle, Beo Clean Energy, incorporated in Serbia in September 2017 by Suez-Itochu consortium (50/50), with purpose of building, operating and financing the project.

EBRD Finance Summary

EUR 84,600,000.00

Up to EUR 84.6 million.

Total Project Cost

EUR 326,500,000.00

The project has total investment size estimated at EUR 326.5 million, envisaged to be financed by equity and non-recourse debt with international finance institutions: the EBRD, IFC and EIB.

Environmental and Social Summary

Categorised A (2014 ESP). The project involves the establishment of a new EU-compliant solid waste site that will provide controlled waste management to the City of Belgrade. The existing unmanaged dump on the adjacent site will be closed and subject to environmental remediation and management measures including leachate and landfill gas collection. The project also includes the construction of an EfW plant that will generate up to 29MW of electricity and 56MW of heat. The current site is 40 years old and is one of the largest uncontrolled dumps in Europe. It is located near the Danube river, which is likely to be receiving significant volumes of untreated leachate. Closing this dump and replacing it with a managed facility will result in significant environmental and social benefits for the City and residents of Belgrade.

An informal community of approximately 80 people live and work on the site in makeshift houses. The nearest other residences are located approximately 3km from the dump site. The city is preparing a Resettlement Action Plan (RAP) for relocating the families from the informal settlement. This will need to meet lender requirements and be approved and disclosed by both the City Council and the City Assembly. Waste pickers work on the site and are understood to have contracts with the subcontractors to the city's waste management company. A Livelihood Restoration Plan (LRP) will need to be prepared in line with lender requirements to address the needs of any displaced workers.

The project requires an Environmental and Social Impact Assessment (ESIA), which will be disclosed for at least 60 day. There will also be a local public consultation process. The project has appointed consultants to carry out this ESIA in line with EBRD performance requirements and Serbian legislation. The project will be expected to comply with national and EU waste management legislation including EU Landfill Directive and EU Framework Legislation on Waste. This project summary document will be updated once the ESIA and RAP are published.

Technical Cooperation

None.

Company Contact Information

Vladimir Milovanovic
v.milovanovic@bcenergy.rs
+381117154884
+381117154886
https://bcenergy.rs
Beo Clean Energy Tosin bunar 272v, 11070 Belgrade 11070 Serbia

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