Green Cities: Chisinau Solid Waste

Location:

Moldova

Project number:

47314

Business sector:

Municipal and environmental infrastructure

Notice type:

Public

Environmental category:

A

Target board date:

20 Jun 2018

Status:

Passed Final Review, Pending Board Approval

PSD disclosed:

10 Aug 2017

Translated version of this PSD: Romanian

Project Description

The project comprises a sub-sovereign loan of up to EUR 9 million to Regia Autosalubritate, a municipal solid waste management company. The loan will be guaranteed by the municipality and is expected to be co-financed with an EIB loan of up to EUR 9 million and an investment grant of up to EUR 5.0 million from E5P.

The proceeds of the loans and grant will finance a priority investment programme in solid waste management, including: (i) closure of the recently re-opened section of the Tintareni landfill and rehabilitation and upgrade of the remaining sections of the Tintareni landfill to EU standards; (ii) rehabilitation of the access road to the landfill; (iii) closure of a temporary dumpsite in Ciocana, Chisinau; (iv) renewal of the Company’s vehicle fleet; and (v) refurbishment of the existing transfer station and investment into a waste sorting plant.
 

Project Objectives

The project aims to contribute to an improved level of solid waste services and overall improved environmental situation in Chisinau.

Transition Impact

Good.

The project will have the following Transition Impact:

1. Green:  The primary goal is to achieve significant environmental improvements and promote the green transition quality in Chisinau.

2. Well-governed: The Project will mandate the introduction of cost recovery charges for the users of infrastructure. Development and adoption of a full cost recovery tariff methodology for solid waste services, taking into account affordability constraints, will be facilitated with TC support as well as the preparation and adoption of a Public Service Contract (PSC) to establish transparent contractual arrangements for solid waste service provision. The PSC is expected to set out clear rights and obligations, with clear Key Performance Indicators and related methodology for service payments, which will provide incentives and predictability for the Company.
The Chisinau Solid Waste project will contribute to an improved level of solid waste services, and improve the environmental situation in the city of Chisinau.

 

Client Information

CHISINAU SOLID WASTE COMPANY

The borrower will be Regia Autosalubritate that is fully owned by the City of Chisinau and responsible for collection, transportation and disposal of municipal waste as well as for operation of landfills. It employs 341 people and collects 1.6 million tonnes of waste per year with up to 65 per cent organic and 23 per cent recyclable . Collection and transportation is carried out using a fleet of 55 specialised vehicles. Sorting operations are limited to glass and plastic. It is a self-financed legal entity and includes all the property and operational assets required for its functioning.

EBRD Finance Summary

EUR 9,000,000.00

Total Project Cost

EUR 31,810,000.00

Environmental and Social Summary

Categorised A (ESP 2014). The project will result in a number of  environmental and social (“E&S”) benefits, including: improved residential waste collection services and increased recycling of waste; landfill operations with strict environmental, health, safety and social management controls; closure of the Ciocana dumpsite and the recently re-opened section of Tintareni landfill; rehabilitation of an existing access road and road maintenance that will also benefit local community; and other benefits related mainly to public infrastructure improvements for the residents of Tintareni.

The ESIA disclosure package was disclosed on 10 August 2017. This includes a Stakeholder Engagement Plan (SEP) to ensure key stakeholders are informed in a timely manner of the potential impacts of the Project. No significant concerns were raised during the public consultation meetings held in four villages. However, in Tintareni, where there had been complaints about the landfill in the past, the planned public meeting could not be held as an agreement could not be reached with the Tintareni Mayor. As an alternative, a public opinion survey was carried out to obtain views from residents of Tintareni and two other nearby villages about the project. The survey concluded that there is an overall low awareness of the project and the majority of population has negative views towards the Tintareni landfill operation. Among the respondents who had some knowledge of the project, fewer people hold negative views. 

The Tintareni landfill site is located in a rural setting. No houses are located adjacent to the landfill and the nearest settlements are approximately 2.7km from the site. The operations of Tintareni Landfill started in 1991 and were suspended in 2010 due to complaints by the villagers regarding alleged pollution of groundwater. To fully assess the situation and associated risks, the Bank commissioned detailed geological and hydrogeological surveys and a quantitative Hydrogeological Risk Assessment (HRA). The results of the HRA indicate that the risk of the current landfill to the identified receptors is low. Following the HRA, a number of additional control measures were included in the Environmental and Social Action Plan (ESAP) to ensure the facility is compliant with the EU Landfill Directive.

As response to the re-opening of the Tintareni landfill in July 2017, the Bank has mobilised the ESDD consultants to undertake an additional E&S assessment of the risks for the project, review and adapt the project design to the new conditions, amend the disclosure documents as well as to determine amendments required for the ESAP and SEP to ensure the project is structured to meet the EBRD PRs. An addendum to the ESIA covering the results of the additional E&S assessments, revised ESAP and SEP have been disclosed on 20th April 2018.

The unplanned reopening of the Tintareni landfill and the poor operational practices currently implemented during the disposal of the waste can potentially worsen the public view about the project. To raise awareness about the project and its potential benefits to the public and environment, an information leaflet has been prepared and will be distributed to all residents of Tintareni village. Further stakeholder engagement will be carried out as per the project Stakeholder Engagement Plan (SEP).

Currently, the hazardous waste from the households in Chisinau cannot be separately collected; hence the municipal solid waste contains a small fraction of hazardous waste that will be disposed of in the new landfill. Considering the location of the landfill, its robust design and the operational measures that will be put in place, the disposal of this small quantity of hazardous waste is not expected to result in any significant risk for the environment or human health.

Despite all the improvements to be implemented as part of the project, further investments would be needed to achieve compliance with EBRD PRs and EU Waste Framework Directive with respect to management of hazardous and medical waste, as well as recovery and recycling of organic wastes. Therefore, on account of limited financial resources and affordability constraints that would appear if such further investments were implemented, derogation from the 2014 Environmental and Social Policy is sought. The shortfalls from EU requirements are not considered to pose significant environmental, health or safety risks.
ESDD identified that the Ciocana dumpsite that will be closed as part of the project is was being used by approximately 50 informal waste pickers (15 to 20 regularly engaged in waste picking). To compensate for the loss of livelihoods of the waste pickers, a Livelihood Restoration Framework (LRF) was developed in compliance with Moldovan legislation and the EBRD PR5. Although not all the LRF provisions were implemented  prior to the sudden closure of the dumpsite, all the waste pickers were offered an opportunity for a formal job at a sorting station.

An ESAP has been prepared to address the findings of the ESDD and improve E&S performance and risk management. ESAP will be amended and agreed with the Client prior to signing.
 

There is an Environmental and Social Impact Assessment available for this project.

Technical Cooperation

Feasibility Study, consisting of full financial, technical and economic due diligence of the Project. Cost of the TC assignment is EUR 390,729, financed by the Government of Sweden.

Environmental and Social Impact Assessment (ESIA) financed out of the Bank's Shareholder Special Fund (SSF) in amount of EUR 249,160.

Post Loan Signing the following TCs will be implemented:

  • Project Implementation Support.  The TC will support the PIU with engineering design, procurement, preparation and evaluation of tenders, contract award and administration, financial control, project management and reporting.  The estimated cost of the assignment is EUR 550,000, with financing source to be defined.
     
  • Corporate Development and Stakeholder Participation Programme.  The TC will (i) support institutional development in the form of operational improvements and financial improvements to secure sustainability of solid waste management services and PSC implementation;  and (ii) implement a SPP, aimed at enhancing public ownership by encouraging recycling, re-use and safe disposal, increasing public participation in the provision of sustainable waste management practics and raising public awareness on issues related to the project implementation and resource efficiency.  The estimated cost of the assignment is EUR 300,000, with the financing source still to be defined.

Company Contact Information

Mrs. Mariana Nazarenco
regia-auto@mail.ru
tel. +373 22 740919; +373 22 746842
14, 27 Martie 1918 Street, Chisinau, MD-2069 Moldova
 

Business opportunities

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