Borjomi Water Project

Location:

Georgia

Project number:

37801

Business sector:

Municipal and environmental infrastructure

Notice type:

Public

Environmental category:

B

Target board date:

28 Oct 2008

Status:

Signed

PSD disclosed:

03 Oct 2007

Project Description

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

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 Client

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.

EBRD Finance

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.

Project Cost

EUR 9.3 million (including VAT).

Environmental Impact

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.

Technical Cooperation

Pre-signing:

  • 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).
 

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

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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.