The EBRD is considering providing a loan to finance a programme of priority capital investments, to improve the municipal water services in the Central Tajik cities of Gissar, Shachrinav, Somoniyon, and Turzonzoda. The overall objectives of this Project are to: (i) rehabilitate the water supply system and, where applicable, allow selected wastewater improvements; (b) improve both billing and collection; and (c) improve financial and operational management.
ETI score: null
The transition impact of this project is expected to include:
- Access to basic public utilities;
- Increased collection rates;
- Introduction of tariff reform within affordability limits including support to low income groups; and
- Improvements to the operational and financial management of the participating Water Supply companies, together with enhanced transparency and corporate governance.
WATER AND SEWAGE COMPANY OF TAJIKISTAN
The client for this project is the State Unitary Enterprise Khojagii Manziliyu-Kommunali ("KMK"), which is the owner of the water companies in the four cities.
EBRD Finance Summary
The EBRD is considering a US$ 7 million sovereign guaranteed loan to KMK in an amount of USD 7 million. The proceeds of the loan will be on-lent to the respective water companies.
Total Project Cost
US$21 million including related technical cooperation. The project will be co-financed by an investment grant from an international donor.
Environmental and Social Summary
The project has been categorised B under the EBRD Environmental and Social Policy. An Environmental and Social Audit/Review of the four participating Water Companies' current EHSS management practices, operations and facilities, and an Environmental and Social Analysis of the proposed Priority Investment Programme (PIP) were carried out as part of the Feasibility Study by independent consultants.
The implementation of the proposed PIP is expected to significantly improve efficiency, reliability and quality of water supply and wastewater collection in the central part of Tajikistan, thus contributing to the provision of uninterrupted access to safe drinking water, prevention of ground and watercourses pollution and improvement of public health. PIP components will mostly involve renovation of the existing water production, supply and distribution in the Central Tajik cities of Gissar, Shachrinav, Somoniyon, and Turzonzoda.
Any adverse future environmental and social impacts associated with the Project are site-specific and readily addressed through adequate mitigation measures. The implementation of the PIP involves construction works that will result in limited, localised and short-term adverse environmental impacts, which will be mitigated or prevented by adhering to good construction practice.
The due diligence investigations showed that the participating Water Companies have weak EHSS management capabilities and underdeveloped EHSS management systems, and that their current occupational health and safety and stakeholder engagement practices require further improvement to meet EBRD's Performance Requirements (PRs).
The companies' facilities are currently in poor operating condition resulting in unreliable and low quality water supply, high water losses and energy consumption. Wastewater collection networks are incomplete and wastewater treatment is absent in most cities. The due diligence concluded that for all four localities the reliability and quality of the drinking water supply will be significantly improved to meet local requirements, however additional further long-term investments into water networks and treatment would be required to bring it in full compliance with EU standards.
Renovation of wastewater infrastructure needs to be included in the long term investment programme due to affordability reasons. At this time the financing for the long-term investment programme from the Companies' own revenues cannot be confirmed and no potential sources of external funding has been identified. Therefore, on account of constraints arising from affordability and limited financial resources, derogation will be sought from the EBRD's Environmental and Social Policy.
The ESDD showed that the project will have a significant positive impact on public health and the environment despite the project not being able to achieve full EU compliance in the short term. The human health implications of the shortfalls from EU standards are assessed to be minor compared to the benefits of the PIP implementation resulting in safer and more reliable water supply to the local population. However, untreated wastewater discharges will remain in the short term and continue to present health risks to the local communities. Awareness raising programmes to prevent risks of water borne diseases will be developed and implemented as part of mitigation plans
Environmental and Social Action Plans (ESAPs) have been developed for the participating Water Companies to bring them into compliance with national regulations and to meet EBRD's PRs, where financially feasible. ESAPs include the necessary improvements in Companies' EHSS management and capacity, improvement of water monitoring practices and chlorine handling procedures, formalising HR practices, including improving equal opportunities with respect to gender and developing better OHS practices, fire safety and emergency response procedures, improving solid waste management practices.
Technical Cooperation and Grant Financing
The following technical co-operation ("TC") funds are envisaged as part of this project
Project Implementation Support. International consultants to assist the project implementation group within KMK and the water companies with engineering design, procurement, preparation and evaluation of tenders, contract award administration, financial control, project management and reporting. (US$ D 1.1 million to be financed by an international donor or the ETC Fund)
Corporate Development Programme. To support operational and financial improvements to ensure the sustainability of the individual water companies. The TC would also include regulatory support as required, based on achievements of TCs for the South Tajik project (Project ID 37656) and North Tajik project (Project ID 40717), which are under implementation. (US$D 1 million to be financed by an international donor or the ETC Fund).
Stakeholder Participation Programme. To implement a Stakeholder Participation Programme in the participating cities. (US$D 350,000 to be financed by EBRD's Water Fund).
Company Contact Information
Republic of Tajikistan, Dushanbe, N.Karaboyev street 56
The Project is a part of the Bank's Integrated Approach that addressed urgently needed water infrastructure modernisation in the selected cities of Tajikistan in combination with sector wide reform support to create operationally and financially sustainable water supply operations in the country. The Project was able to improve the quality and reliability of water supply in central cities of Tajikistan, namely: Gissar, Shahrinav, Somoniyon, and Tursunzoda. As part of the Project eight new water reservoirs were constructed that resulted in increase of water storage by 8,000 cubic meters and improvement of water supply sustainability, twenty one units of pumps were installed/replaced, more than 90 kilometres of water mains were replaced, twenty two units of operational vehicles procured, chlorination and disinfection equipment installed and water metering introduced. Notably, the investment has helped to reduce energy consumption per cubic meter of produced water by 19 per cent on average.
The project also contributed to prevention of ground and watercourses pollution and improvement of public health and chlorine handling procedures, formalising HR practices, including improving equal opportunities with respect to gender and developing better Operational Health and Safety practices.
As a part of Transition impact, the Project has assisted to identify and implement the necessary corporate, financial and operational improvements (including management information systems and billing system), improve standards of transparency and governance, create a new customer relations strategy and complaints handling procedures. Importantly, the Project has assisted in creation of a first regional water company by merging smaller water utilities and achieving improved management and economy of scales.
PSD last updated
04 Dec 2020
Further information regarding the EBRD’s approach to measuring transition impact is available here.
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