Faizobod Water and Wastewater Project

Location:

Tajikistan

Project number:

48935

Business sector:

Municipal and environmental infrastructure

Notice type:

Public

Environmental category:

B

Status:

Concept Reviewed

PSD disclosed:

25 Sep 2017

Translated version of this PSD: Russian

Project Description

Provision of a loan of up to US$ 1.2 million to the State Unitary Enterprise "Khojagii Manziliyu Kommunali of Faizobod City" (the "Company"), a company responsible for the provision of water supply services in the city of Faizobod (the "City").

The EBRD will also seek an investment grant from international donors of US$ 2.8 million to facilitate implementation of the project which will address urgently needed water and wastewater infrastructure rehabilitation needs.

Project Objectives

The Project aims to rehabilitate water supply and selected wastewater improvements, which will help reduce operational costs as well as increase the reliability of water supply network and improve Company's performance. The Project will also introduce better contractual arrangements between the Company and the City.

Transition Impact

Good.

The expected transition impact objectives of the Project are: (i) energy efficiency; (ii) pilot meterbased billing; (iii) the tariff increases and reforms; (iv) demonstration effect of replicable activities through improved operational performance and environmental compliance; (v) CO2 reduction; (vi) behavioural changes through Stakeholders Participation Programme and increase of collection rates; and (vii) improvement of corporate management standards and business conduct.

The transaction will introduce appropriate corporate governance standards at the Company. A performance based Public Service Contract (the "PSC") will be developed and signed between the Company and the City, which will promote transparent contractual arrangements in the sector.

Client Information

WATER COMPANY OF THE CITY OF FAIZOBOD

State Unitary Enterprise "Khojagii Manziliyu Kommunali of Faizobod City", a municipal company owned by the city of Faizobod. The Company provides drinking water, sewage and waste disposal services as well as street cleaning services to the city.

EBRD Finance Summary

USD 1,200,000.00

A sovereign guaranteed loan of up to US$ 1.2 million to the Company.

Total Project Cost

USD 4,000,000.00

The total project cost is estimated at US$ 4.0 million excluding technical cooperation.

Environmental and Social Summary

Categorised B in accordance with the EBRD’s Environmental and Social Policy 2014. The Environmental and Social  due diligence (ESDD) for the proposed Priority Investment Programme (PIP) was carried out as part of the Feasibility Study by independent consultants, and it included a review of current practices, an assessment of potential E&S impacts of the project and a review of E&S provisions and management capacities within the Company. The ESDD showed that the implementation of the project will significantly increase access to safe drinking water through improving the reliability of water supply services in the City of Faizobod and by the connection of eleven additional villages with approximately 15,000 people. The project will also include construction/reconstruction of the wastewater networks which will allow for connection of approximately 5,500 new customers (22,000 people connected in total) and an increase in the volume of treated wastewater by approximately 3500 m3/day, both in the next 10 years.

Positive environmental and social benefits of the PIP are numerous and include reduction of the risk of morbidity by infectious diseases in rural areas; reduced water losses to 25-30%; improved quality of drinking water; provision of the guaranteed 24-hour water supply to all users of the city of Faizobod; provision of a stable water supply of 4 villages located along the waterway routes; improvements to system reliability, decrease in repairs which are associated with nuisance for dwellers and traffic disturbances, lower accident rate at networks and, therefore, lower number of water supply interruption cases and lower risk of secondary contamination; reduction of contamination in the Loyak and Elok rivers; reduction of energy consumption; reduction in unsustainable water consumption; better working conditions; and improvements in operational safety.

Current water supply in Faizobod and surrounding villages is poor and limited to a few hours per day.  There are community health risks related to the secondary contamination of the Loyak River by untreated wastewater, which is used as drinking water source by rural communities.

The Company has limited capacity on EHSS matters. It does not have any E&S Management System or HR policies and related procedures, such as a grievance mechanism. The Company is not fully in compliance with national environmental legislation, for example, it does not hold permits for water abstraction. The Company has no internal laboratory; water quality control is exercised only by testing of residual chlorine content.  The Company largely meets national requirements on occupational health and safety; however, further improvements are required to meet EBRD PR4.

Adverse E&S impacts associated with the implementation of the PIP will be limited, localised and temporary, and prevented or mitigated by adhering to good construction practices. The proposed project areas will be mainly confined to existing Company sites, or within the existing pipeline corridors. ESDD has confirmed that no sensitive areas are found in the Project area. Some of the water mains, either new or those to be refurbished, run through the natural landscapes. Construction works in these areas may cause disturbance to the local wildlife which is a particular risk during the nesting and breeding seasons. To mitigate this risk construction work will need to be scheduled outside of these periods. The findings of the local EIA, which is yet to be undertaken, and resulting recommended mitigation measures will need to be incorporated into the EBRD Environmental and Social Action Plan (ESAP). The project implementation will not require any resettlement, and only limited and temporary disturbance to arable land is anticipated. This can be managed to avoid economic impact on harvests. Nevertheless, requirements to carry out a resettlement screening procedure and develop a compensation and/or livelihood restoration action plan, if required, have been included in the ESAP.

Climate warming by several degrees in Dushanbe region, increasing water demand both by the environment and human activities and ongoing depletion of water resources require further improvements to water efficiency and water demand management to optimise the use of limited water resources. The sustainability of water sources and the groundwater reserves will be investigated through a hydrogeological survey which is included in the PIP. The project envisages groundwater abstraction for drinking water purposes to be within 500 thousand m3 per year. Climate change may also increase in the frequency and severity of flooding posing a threat to vulnerable infrastructure, such as the sewage drainage system and the biological treatment ponds. The design of the integrated biological treatment facilities should include resilience measures to protect the structures from erosion and flooding impacts, where necessary.

Water quality, for the parameters tested during ESDD, conform to the Republic of Tajikistan, WHO and EU standards however laboratories do not exist in the country to conduct a full spectrum analysis against EU drinking water quality parameters. A full spectrum analysis has therefore been included in the ESAP.

To achieve full compliance with EU environmental standards for water and waste water systems it is estimated that additional long-term investments of more than 15 million USD would be necessary. Therefore, on account of constraints arising from affordability and limited financial resources, derogation from the EBRD's Environmental and Social Policy is sought in relation to EU drinking water quality and wastewater treatment and discharge standards. The human health implications of the shortfalls from EU standards are assessed to be minor as compared with the substantial benefits of the PIP implementation resulting in more reliable, efficient and better quality water supply to the local population as well as improved wastewater management. Significant improvement of the water quality and sanitary conditions of the Loyak and Elok Rivers and improvements to operational efficiency and health and safety of employees and contractors are expected. There will be a significant improvement to the sanitary conditions in rural villages thereby minimising the risk of water-borne diseases.

The affordability assessment carried out by the Bank did not identify significant water tariff affordability concerns from the implementation of the project investments with the envisaged grant support and subsidies from the respective regulatory bodies for more vulnerable groups.

ESAP has been developed for the project, and a Stakeholder Engagement Plan (SEP) and a non-technical summary (NTS) have also been developed. The ESAP requires the Company to implement a number of improvements designed  to meet the EBRD’s PRs. the key ESAP actions are related to: EHS and HR policies and procedures; implementing an E&S management system; developing EHS capacity; carrying out necessary studies to obtain permitting required by national legislation; contractors EHS management programme; trench safety and confined space working procedures: development of waste management programme; prevention of impacts to biodiversity through planning and design; screening for physical and economic displacement and development of the necessary compensation/ livelihood restoration plan if necessary; and implementation of the SEP.

The EBRD will be monitoring the implementation of the project and the ESAP as well as the environmental and social performance of the project through reviewing the Client’s annual environmental and social reports and undertaking monitoring visits as needed.

Technical Cooperation

The following technical cooperation (the "TC") assignments are envisaged as part of this project:

Pre Loan Signing

  • Technical due diligence to support scoping and structuring of the project, financial analysis and an environmental and social assessment (€190,000 financed by the EBRD Shareholder Special Fund).

Post Loan Signing

  • Project Implementation Support. International consultant to support the Project Implementation Unit with detailed engineering design and approval, procurement, preparation and evaluation of tenders, contract award and administration, financial control, project management and reporting. The estimated cost of the assignment is up to €500,000 proposed to be financed by an international donor, the ETC Fund or the SSF.
     
  • Corporate Development Support Programme. The estimated cost of the assignment is up to €350,000 proposed to be financed by an international donor, the ETC Fund or the SSF.

Company Contact Information

Rozikov Muzaffar
faizobodwater@mail.ru
+992937243656
Zebuniso Street 31, Faizabad, Republic of Tajikistan Postal code 735413

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.