Bijeljina Phase 2 Wastewater Treatment Plant

Location:

Bosnia and Herzegovina

Project number:

40775

Business sector:

Municipal and environmental infrastructure

Notice type:

Public

Environmental category:

B

Target board date:

22 Jun 2010

Status:

Repaying

PSD disclosed:

06 Apr 2010

Translated version of this PSD: Bosnian

Project Description

The EBRD is considering providing a loan of up to €5 million to part-finance the construction of a waste water treatment plant and the construction of the primary waste water collector, further development of secondary waste water collection network and expansion of the potable water supply network in the city of Bifeliina.

The objectives of the project are to enable the compliance with the EU directive for urban waste water and to prevent further pollution of underground water (aquifers) that are used as the source of potable water, thus reducing the health hazard for the town’s population.

Transition Impact

This is the second project with Vodovod i Kanalizacija. The incremental transition impact relates to introduction of a company loan to a municipal utility for the first time in the country, to improved environmental standards that go beyond current national standards and introduction of reasonable efficiency targets on areas such as labour cost and technical losses. This transaction also supports the implementation of the transition impact potential identified for the first water project through strengthening the loan covenants.

The Client

Vodovod i Kanalizacija Bijeljina is a joint stock company with 65% of the equity owned by the Government of Republika Srpska, 10% owned by the Republika Srpska Pension Fund and 5% by the Restitution Fund of Republika Srpska. The remaining 20% is owned by individuals and investment funds.

EBRD Finance

Up to €5 million Loan to Vodovod i Kanalizacija Bijeljina with Sovereign Guarantee from Bosnia and Herzegovina, to be backed by a counter guarantee from Republika Srpska

The European Union is providing a €5.5 million of grant co-financing (€2 million through the EU Municipal Window for the wastewater treatment plant and €3.5 million through the National IPA 2009 Crisis Response package for expansion of water supply and wastewater collection Bijeljina networks).
Swedish International Development Cooperation Agency is providing additional grant co-financing equivalent to €4 million? for the wastewater treatment plant.

Project Cost

€21 million.

Environmental Impact

Screening category and rationale for classification

This project has been categorised "B" in accordance with EBRD's 2008 Environmental and Social Policy. The construction of a Wastewater Treatment Plant (WWTP) with initial capacity of 40,000 population equivalent, primary and secondary waste water collectors and increased connections to the water supply network in Bijeljina will have mainly positive long-term social and environmental impacts. Where there is adverse future environmental and social impacts associated with the project, these are site-specific and readily addressed through mitigation measures.

Information reviewed

The environmental and social due diligence included a site visit, review of the Company’s EHS management practices; environmental, health and safety and social (EHSS) management systems; and a review of the project design requirements to assess current performance against EBRD's Performance Requirements (PRs).

Project related documents (an environmental and social summary of the project, Stakeholder Engagement Plan and a summary of the Environmental and Social Action Plan) are available on the Sponsor’s website.

Environmental and Social issues

Due diligence showed that the Project will significantly improve Bijeljina’s waste water quality, increase the number of connections to waste water network, protect the local community from environmental and public health risks (primarily via contamination of ground water and potable water sources from septic tanks), thus having high social and environmental benefits for the town. The construction of the WWTP will enable compliance with the EU Urban Waste Water Directive (Council Directive 91/271/EEC) requirements to be achieved. As for the sewage sludge treatment, disposal to agricultural land is the recommended option and measures to ensure safe application will be instituted as part of the procurement process for the construction of wastewater treatment plant.

The quality of drinking water supplied by the Company meets the standards set in the EU Directive on the quality of water intended for human consumption (Council Directive 98//83/EC). The project will enable the Company to maintain this compliance.

The Company does not have formal management systems in place, but has recently established an Environmental Unit to develop systems to monitor the wastewater network. Due diligence identified that some additional resources and procedures are needed to achieve compliance with EBRD’s Performance Requirements (PR’s). Issues to be addressed include:

  • Improvements to Contractor EHS management and monitoring;
  • No documented worker grievance mechanism;
  • Lack of defined operational control procedures for some activities with EHS risk; and
  • There are no Company procedures addressing affordability issues related to vulnerable households affected by tariff increases.

Summary of Environmental and Social Action Plan

An Environmental and Social Action Plan (ESAP) has been developed to address potential environmental and social impacts identified during the due diligence. The ESAP will include the requirements for the following:

  • Defining Contractor Environmental, Health, Safety and Social requirements in contracts and improving the monitoring of contractor performance;
  • Grievance Mechanisms for workers and stakeholders; and
  • Procedures and plans for: trench safety; noise and vibration; emergency preparedness and response; cultural heritage protection; assistance to people adversely affected by the project and information disclosure.

The Company will provide the Bank with regular reporting on its environmental performance and the implementation of the ESAP.

Technical Cooperation

€400,000 for assistance with project management, procurement and reporting Funded by the European Union under the Western Balkan Investment Framework.

 

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

Project Complaint Mechanism (PCM)

The Project Complaint Mechanism (PCM) is the EBRD's accountability mechanism. It provides an opportunity for an independent review of complaints from individuals and organisations concerning EBRD-financed projects which are alleged to have caused, or are likely to cause, environmental and/or social harm.

Please visit the Project Complaint Mechanism page to find information about how to submit a complaint. The PCM Officer (pcm@ebrd.com) is available to answer any questions you may have regarding the submission of a complaint and criteria for registration and eligibility, in accordance with the PCM Rules of Procedure.