Clean City Project

Location:

Azerbaijan

Project number:

47944

Business sector:

Municipal and environmental infrastructure

Notice type:

Public

Environmental category:

B

Status:

Cancelled

PSD disclosed:

13 Jul 2017

Translated version of this PSD: Azeri

Project Description

A loan of up to USD 39 million to finance critical solid waste investments in the city of Baku and adjacent areas on the Absheron peninsula (the "Greater Baku").

The proceeds of the loan will finance construction of two transfer stations and sorting facilities whereby optimising waste transportation and reducing the volume of waste disposal. The proposed project (the "Project") is consistent with the Bank's Green Economy Transition approach by reduction in carbon emissions and decrease in total waste transportation.

Project Objectives

The Project will improve efficiency of solid waste management in the Greater Baku.

Transition Impact

Good.

The Project will bring substantial environmental benefits and operational efficiency. By optimizing waste transportation, CO2 emissions from the transportation vehicles, total waste transportation costs are, and illegal waste disposal is expected to decrease significantly. Financial and operational performance improvement of the Company will be also developed through the corporate development programme (CDP).

Client Information

AZERBAIJAN SOVEREIGN

Tamiz Shahar (the "Company") is a joint stock company 100 per cent owned by the state to manage waste disposal in the Greater Baku.

EBRD Finance Summary

USD 39,000,000.00

Sovereign loan of up to USD 39 million to the Republic of Azerbaijan, on-lent to the Company.

Total Project Cost

USD 39,000,000.00

The total sub-project cost is USD 40.3 million, including technical cooperation.

Environmental and Social Summary

Categorised B (2014 ESP). Independent consultants were engaged by EBRD to carry out an environmental and social audit of waste collection in the Greater Baku area, and an appraisal of the anticipated impacts and benefits of this project. The consultants have visited the project sites and reviewed documents relating to designated natural areas, baseline data on air pollution, labour relations, occupational health and safety, information on employment and social programmes in Greater Baku region, and information on the national and local waste management development plans.

Tamiz Shahar and Baku City Executive Power are the main entities responsible for the development and operation of municipal solid waste ("MSW") management in the Greater Baku region. The company operates a solid waste land at Balakhany with a nearby sorting and treatment facility and a waste to energy plant. The storage, collection and transport of MSW from all the Baku districts is often inadequate, fragmented and uncoordinated and it is estimated that only a small fraction (around 2-5%) of the waste collected from the Garadagh and Khazar districts ultimately reaches the Balakhany landfill (2012 Feasibility Study). As a consequence, numerous unauthorised dumps in Khazar and Garadagh districts are used for the waste discharge.

This project will address this problem by building waste transfer stations in these districts where waste can be collected prior to its transportation to the disposal or processing site. Consolidating smaller loads from collection vehicles into larger transfer vehicles improved efficiency and reduces hauling costs by enabling collection crews to spend less time travelling to and from distant disposal sites, and more time collecting waste. Additional sorting facilities create more potential for recyclable material recovery should source waste segregation practices expand.

Increasing the disposal of waste at a managed site will allow for more capture and use of landfill gases that would otherwise be released to the atmosphere at uncontrolled dumps. The project will introduce additional dump truck but overall fuel use will decrease as there will be fewer small truck travelling long distances. The due diligence consultants have estimated that net impact of the project over a 20 year operating period will be a decrease on emissions on 1,245 thousand tonnes CO2e, or approximated 62 thousand tonnes per year.

Two locations have been identified that provide sufficient land for transfer stations and good access to the main arterial roads and highways. One of them was the location of the old Garadagh landfill rehabilitated earlier by Tamiz Shahar, and the other is located in the area of a former illegal dump site in Shuvalan village of Khazar district. The project appraisal has not identified any significant environmental or social sensitivities directly associated with these sites. The land plots in Garadagh and Khazar districts are unoccupied and were allocated to Tamiz Shahar by the Baku City Executive Power in 2009 and 2013 respectively. At the Garadagh site, 16 residential homes are located within the 300m sanitary zone. These were reportedly built after the land was allocated to Tamaz Shahar. While impacts on these residents are not expected to be significant, the ESAP requires the company work with the affected people and relevant health and planning authorities prior to obtain a mutually agreed solution to this issue prior to starting project construction.

The ESAP also contains actions to improve Tamiz Shahar's environmental, health, safety and labour management. Mitigation measures have been agreed to minimise dust and odour impacts from the sites and to address the road safety risks associated movement of waste by trucks. A Stakeholder Engagement Plan and Non-Technical Summary have been developed for this project. EBRD will monitor implementation via annual environmental and social reports provided by Tamiz Shahar.

SEP (Stakeholder Engagement Plan)

NTS (Non-Technical Summary) 

Technical Cooperation

Pre-Signing

Feasibility study, consisting of full financial, technical and environmental due diligence of the Project. EUR 249,700, financed by the EBRD Early Transition Countries (ETC) Fund; Restatement and Audit Services for the Company. EUR 16,500, financed by the Bank's own budget.

Post-Signing

PIU Support, Engineering Design Services, Procurement and Contract Supervision. The estimated cost of the assignment isEUR 978,000, proposed to be financed by the Company from the loan proceeds and an international donor, the ETC Fund or the EBRD Shareholder Special Fund (SSF); Corporate Development and Stakeholder Participation Programmes (SPP), comprising support to the Company to optimise operations including improved financial, operational and environmental performance to raise institutional capacity to effectively manage the Project, including enhanced environmental monitoring capacity. The SPP will enhance public awareness of solid waste management and project related issues. The estimated cost of the assignment is EUR 400,000, proposed to be financed by an international donor, the ETC fund or the SSF.

Company Contact Information

Faig Mammadov
f.mammadov@tamizshahar.az
(+99412) 464 41 11 ext 139
http://www.tamizshahar.az
AZ1025, 55, Khojaly ave, Baku, Azerbaijan

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