The proposed project entails rehabilitation of the water and wastewater supply network.
In addition to these capital investments, the project will install meters to customers and include a financial operational performance improvement programme for the company as well as support to the city.
The EBRD is considering making a sovereign loan of EUR 1.5 million to Georgia to support the rehabilitiation of the water and wastewater supply network in the city/area.
Transition impact will be:
Performance improvement and commercialisation of the Company as a result support provided through the corporate development technical cooperation project.
A new tariff and collection policy will be agreed with Borjomi and Georgia with agreed milestones covenanted in the loan agreement. Raising tariffs and improving collections will enable the Company to generate sufficient cash flow to ensure cost recovery.
Skills and knowledge transfer will take place during the Technical Co-operation Programmes through the PIU support, FOPIP and corporate development programme and city implementation support programme.
- To ensure long term sustainability, regionalisation of Borjomi’s operations to include Bakuriani.
The project consists of a sovereign loan to Georgia on-lent to the Borjomi Water Company to finance the rehabilitation of the water and wastewater treatment systems. The Municipal Development Fund will work closely with the City to implement the project.
Sovereign loan of up to EUR 1.5 million to Georgia to be on-lent to the Borjomi Water Company.
Grant co financing is expected to come from the following sources: Millennium Challenge Corporation/Millennium Challenge Georgia (USA) and other international donors.
EUR 9.3 million (including VAT).
The project has been screened as B/1, requiring an environmental audit of the main assets of the Borjomi Tskalkanali Water Company and an environmental analysis of the proposed investments. Environmental due diligence should also assess the sustainability of water sources in the Borjomi Region. Following the completion of the audit and the analysis, any resulting recommendations will be formulated into a time-bound, costed environmental action plan ("EAP") which, once agreed with the Company, will be included in the legal agreements.
TC 1: Feasibility Study (EUR 250,000 funded by the EU Water Investment Support Facility) for a financial, technical and environmental due diligence on the proposed project (under completion)
TC 2: Audit (EUR 24,000 funded by Bank’s own resources) for an audit of the accounts of the Borjomi Water Company
- TC 3: Engineering Design & Field Supervision (EUR 165,000 funded by oil company British Petroleum (“BP”) for design and supervision
Post Loan Signing:
TC 4: Project Implementation and Procurement Support services (combined for Borjomi, Rustavi and Kobuleti water projects) (EUR 400,000): International consultants to assist the project implementation unit during the estimated three year implementation period. The consultants will provide comprehensive engineering design, tender evaluation, contract award and administration, financial control, project management, and reporting services. (To be funded by SIDA).
- TC 5: Corporate Development and City Support Programme (combined for Borjomi and Rustavi) (EUR 500,000): to (i) assist the Company to identify and implement the necessary corporate, financial and operational improvements (including MIS) to meet the related covenants included in the EBRD financing documents as well as ongoing corporate development, (ii) assist the City to develop a service contract to be signed between the City and the Company. (To be funded by the ETC Fund).
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