Chisinau Water Development Programme

Location:

Moldova

Project number:

44027

Business sector:

Municipal and environmental infrastructure

Notice type:

Public

Environmental category:

B

Target board date:

04 Sep 2013

Status:

Disbursing

PSD disclosed:

12 Jun 2013

Translated version of this PSD: Moldavian

Project Description

The EBRD is considering providing a loan of up to EUR 24 million to S.A. Apa Canal Chisinau (the Company) for an upgrade of the water supply and wastewater treatment system in the city of Chisinau.

It is expected that the European Investment Bank would provide a co-financing loan up to EUR 24 million and that the EU’s Neighbourhood Investment Facility (NIF) would provide EUR 11 million in the form of a grant.

The proceeds of the loans and the grant will finance the extension, rehabilitation and modernisation of the water and wastewater infrastructure. The proposed investments will enable the Company to increase operating efficiency with energy savings and reach compliance with the EU Water and Wastewater Directives in its service area in Chisinau.

In order to measure the success of this project, the Bank will monitor the following indicators before and after project implementation:

  • Reduction in tonnes of CO2 equivalent derived from the lowering of water losses system-wide. Measured by average (for sector) kwh used to produce 1 cubic meter of water, multiplied by the amount of cubic meters of water losses eliminated
  • Water losses (per cent) in project area. Measured by the volume of water in cubic meters billed divided by the volume of water produced in cubic meters.

Transition Impact

Transition Impact of the project comes from:

  • Promoting frameworks for markets and economic efficiency: The Project will help formalise the relationship between the City and the Company within a multi-year incentive based Public Service Contract (PSC). The Company will fine-tune tariff methodology and procedures as a part of the PSC structure
  • Successful demonstration of Company restructuring: Performance improvements and commercialisation of the Company are expected via measures for improvement in cost reductions, financial management, investment planning, organisational efficiency and customer relations management. These improvements will be backed by well-defined TC support.
  • Successful demonstration of new ways of financing: While the Project could benefit from the guarantee of the City, an incentive scheme to release the guarantee in case of better performance of the Company will be introduced through an appropriate contract structure.
    Setting standards for environmental performance: the Project can play a clear role in promoting energy efficiency, by installing low cost yet high impact energy efficiency elements and/or clean energy production levels. Particularly, the use of biogas from the digestion of sludge could supply the majority of the heat and electricity consumption of the wastewater treatment plant.

The Client

S.A. Apa Canal Chisinau, the water and wastewater utility owned by the City of Chisinau.

EBRD Finance

EUR 24 million to the Company.

Project Cost

EUR 61.8 million.

Environmental Impact

The proposed project has been categorised B in accordance with the 2008 EBRD Environmental and Social (E&S) Policy, as the potential impacts are expected to be site specific and readily identifiable and addressed through mitigation measures.

The environmental and social due diligence for the project includes an independent third party environmental and social audit to assess the Company’s management capacity and systems to manage environment, health, safety and labour issues in its operations and an analysis of the potential (future) E&S impacts and benefits. It will also assess the Company’s ability to carry out the Project in compliance with the Bank’s Performance Requirements.

An Environmental and Social Action Plan (ESAP) will be prepared for the project, and a Stakeholder Engagement Plan will be developed that will include a grievance mechanism. Information on environmental and social performance and a summary of the agreed Action Plan will be released to stakeholders.

This PSD will be updated when the results of due diligence are known.

Technical Cooperation

Pre-signing:

1 Feasibility study consisting of financial, technical and environmental due diligence on the Project. Completed at the end of 2012. EUR 3,000,000; funded by the EU Neighbourhood Investment Facility.

Post-signing:

2 Project Implementation Support to assist the Company with engineering design, procurement, preparation and evaluation of tenders, contract award and administration, financial control, project management and reporting. EUR 2,400,000; to be funded by an international bilateral or multi-lateral donor.

3 Corporate Development Programme (“CDP”) for:

(i) corporate development of the Company by implementation of the PSC and development of the Company’s planning capacity;
(ii) implementation of stakeholder participation programme; and
(iii) facilitation of regionalization process. EUR 400,000; to be funded by an international bilateral or multi-lateral donor.

4 Additional Feasibility Study to develop the concept for water pipes to the neighbouring localities to expand the business of the Company. EUR 300,000, to be funded from the Company’s own resources.

 

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.