Bishkek Water II sub-project

Location:

Kyrgyz Republic

Project number:

44129

Business sector:

Municipal and environmental infrastructure

Notice type:

Public

Environmental category:

B

Approval date:

07 May 2014

Status:

Repaying

PSD disclosed:

29 Jul 2013

Translated version of this PSD: Russian

Project Description

The EBRD is considering supporting the Bishkek Water Supply and Wastewater Rehabilitation Phase II project. The EBRD would extend a sovereign loan of up to €8 million to the Kyrgyz Republic, to be on-lent to Bishkek City for the benefit of the Bishkek Water Company for improvement of water supply and wastewater services.

The Phase II Priority Investment Programme to be supported by EBRD will focus on supplementary renovation of the Company’s water supply infrastructure and wastewater collection and treatment in the City.

The EBRD will also seek an investment grant from an international donor of €8 million to facilitate the implementation of the project which will address urgently needed water and wastewater infrastructure rehabilitation needs.

Transition Impact

The transition impact of the project would come from:

  • The introduction of new tariff reform within affordability limits;
  • Increased collection rates;
  • Increased transparency and participation of water users in the decision making process; and
  • the development of a detailed business case for the expansion of water metering.

The Client

Government of the Kyrgyz Republic, with on-lending to Bishkek City for the benefit of the Bishkek Water Company.

EBRD Finance

Sovereign loan of up to €8 million to the Kyrgyz Republic, on-lent to Bishkek City for the benefit of the Bishkek Water Company.

Project Cost

The total project cost is €17 million including technical cooperation. The sub-project will be co-financed by an investment grant from an international donor.

Environmental Impact

The project has been categorised B in accordance with EBRD’s 2008 Environmental and Social Policy. Environmental and social due diligence (ESDD) has been carried out by independent consultants. The ESDD included a review of the due diligence documents and reports for Phase I; an independent environmental and social audit/review of the Company's current operations and facilities (focusing on the issues identified during the ESDD for Phase I); and an analysis of potential environmental and social issues associated with the proposed priority investment programme.

Phase II has been tailored to address some of the remaining environmental, health and social problems and involves drilling of new wells (with total abstraction capacity of 1.26 million m3/year), replacement of water and wastewater pipes, and procurement of laboratory equipment. The due diligence for Phase I had concluded that although the reliability and quality of the drinking water supply in Bishkek would be significantly improved to meet local requirements, additional further long-term investments into water networks and treatment would be required to bring those in full compliance with EU standards. National and EU standards for urban wastewater treatment and sludge management would also not be achieved in full due to poor wastewater collection and inefficient wastewater treatment infrastructure. During the Feasibility Study for Phase I, additional long-term investments required by Bishkek to reach full compliance with EU water and wastewater requirements was estimated over €500 million.

The implementation of the proposed Phase II project is expected to further contribute to the improvement of efficiency, reliability and quality of water and wastewater services in the City of Bishkek. However, the additional funding that can be provided through Phase II will be limited to only €16 million plus around €1 million for consulting and engineering, which is far below the investments required to achieve full EU compliance. Therefore, due to constraints arising from affordability and limited financial resources, derogation from the EBRD's Environmental and Social Policy will need to be sought. During the ESDD for Phase I, the human health implications of the shortfalls from EU standards have been assessed to be minor compared to the benefits of the PIP implementation to deliver safer and more reliable water supply and wastewater services to the local population.

The ESDD confirmed that Bishkek Water Company has gained experience in environmental management through the corporate development and capacity building components of Phase I. Bishkek Water Company has internalized a level of environmental management in several departments and functions. However, roles and responsibilities are not systematically assigned yet. There still is a lack of systematic approach to environmental management and compliance monitoring. Hence, further capacity strengthening will be needed.

Bishkek Water Company has put health and safety (H&S) procedures in place and maintains records of accidents. Causes of potential hazards to workers are identified and minimized. Personal protective equipment such as gas masks is provided and their use is enforced. A training programme has been put in place. Still modernisation of some safety measures is required.

The ESDD has also showed that the project will not result in any land acquisition or economic displacement and will not involve any construction activities within sensitive areas. The environmental and social (E&S) impacts associated with the project implementation are site-specific and can be addressed through adequate mitigation measures.

An Environmental and Social Action Plan (ESAP) has been developed for mitigation of identified E&S issues and impacts during preparation, construction and operation of the project.

The Company will provide the Bank with annual environmental and social reports, including updates on the implementation of the ESAP. The Bank may also conduct monitoring visits as required.

Technical Cooperation

The following technical co-operation (“TC”) assignments are envisaged as part of this project:

Pre-signing

  • TC 1: Technical, financial and social due diligence on the proposed project (€150,000 funded from the EU-IFCA Framework for Central Asia).

Post-signing

  • TC 2: Detailed design and Project Implementation Unit (€500,000 funded by an international donor) International consultants to assist the project implementation unit during the estimated three year implementation period. The consultants will assist with technical design, tender evaluation, contract award and administration, financial control, project management, and quality assurance.
  • TC 3: Corporate Development, Stakeholder Participation and City Support Programme (€350,000 funded by the Early Transition Countries Fund): to build on achievements during Phase I and (i) assist the Company to further improve corporate, financial and operational efficiency measures to meet the related covenants included in the EBRD financing documents as well as ongoing corporate development; (ii) implement a Stakeholder Participation Program covering the entire City; and (iii) assist the City and Company to implement the Public Service Agreement developed during Phase I including a tariff reform (developed during Phase I).

For consultant opportunities for projects financed by technical cooperation funds, visit Consultancy Services.

 

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

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