Horezm Wastewater Project

Location:

Uzbekistan

Project number:

50526

Business sector:

Municipal and environmental infrastructure

Notice type:

State

Environmental category:

B

Approval date:

13 Nov 2019

Status:

Disbursing

PSD disclosed:

14 Feb 2019

As permitted by paragraph 2.6 of Section III of the Access to Information Policy, disclosure of this PSD was deferred in accordance with paragraph 1.4.4 of the Directive on Access to Information.

Project Description

The provision of a sovereign loan of up to US$ 90 million (€80.3 million) to the Republic of Uzbekistan for the benefit of the Limited Liability Company Xorazm Suv Ta'minoti, formerly known as State Unitary Enterprise Horezm Suvokova (the "Company") to finance the rehabilitation of Horezm Oblast's wastewater infrastructure (the "Project") under the Integrated Cultural Heritage Framework (the "Framework").

Project Objectives

The project is expected to increase the number of people connected to the wastewater network by 121,000, and the volume of wastewater treated to EU standards by 4.8 million m3 per year.

Transition Impact

ETI score: 80

Primary Quality - Competitive: The Project is expected to improve the Company's operational and financial performance through a corporate development programme, to contribute to the stronger competitiveness of the tourism sector in the region in the long-term.

 

Secondary Quality - Well-Governed: The Project will enhance the efforts in integrated coordination of tourism development between the private, public and institutional sector stakeholders, by integrating municipal service provision into the tourism development efforts in the region. The Project is also aligned with the action plan prepared for Uzbekistan under the Framework, which envisages capacity building in infrastructure service providers.

Client Information

UZBEKISTAN SOVEREIGN

EBRD Finance Summary

USD 90,000,000.00

Total Project Cost

USD 108,000,000.00

Environmental and Social Summary

Categorised B (ESP 2014). The Project involves replacement and construction of sewer networks, wastewater pumping stations and a major reconstruction of existing wastewater treatment plants ('WWTPs') in Urgench, Khiva, Pitnak and Gurlen. The capacity of the WWTP in Urgench will be 30,000 m3/day, designed to serve the city's population of 140,000. The capacities of the three other WWTPs will be only 5,000 m3/day each, designed to serve the population of 25,000 in each town. An independent Environmental and Social Due Diligence (ESDD) was undertaken as part of a wider Feasibility Study. The ESDD identified that the existing facilities are dilapidated and out of service due to the age of facilities and lack of maintenance and repairs. This poses high environmental and health risks due to the discharge of untreated wastewater into surface water bodies. Therefore, the implementation of the Project is highly expedient and will bring long-term environmental and community health benefits. The Project is consistent with the GET approach, as wastewater will be treated up to EU standards, and the GET share is 100 per cent.

 

Potential environmental and social impacts will be site-specific and readily mitigated through the implementation of the Construction Environmental and Social Management Plans and other contractors' management plans. There will be temporary impacts during the construction associated with increased dust and noise levels, waste disposal and temporary restrictions of access during excavation works. The Project will require national EIAs and obtaining relevant permits. Completion of the EIA and permitting process will be a part of condition precedent to the first drawdown of the capex portion of the loan.

 

Currently, the Company does not have sufficient capacity and resources to manage environmental and social issues and will be required to establish and train a task force to effectively implement and comply with both national legislation and the EBRD's Performance Requirements, and implement the Environmental and Social Action Plan (ESAP). Labour regulations are well-developed and a collective agreement is in place. Construction labour force requirements have not yet been identified, and while construction will offer short-term employment opportunities, the issues of potential labour influx and accommodation will be assessed by the PIU. The introduction of fully-automated processes during the commissioning of the new facilities may potentially trigger retrenchment of the low-skilled and unskilled labour force, and will need to be properly managed. A workers' grievance mechanism will be required for and made available to the whole workforce, including contractors.

 

The design and engineering documents for the proposed investment programme have not yet been developed and the Project Implementation Unit will need to ensure that relevant EU requirements for resource use and wastewater treatment quality are incorporated in the tender specifications. The design of the modernised and new wastewater treatment plants will also need to take into account the ultimate disposal of the treated wastewater and sludge.

 

Any community impacts will be mainly beneficial, as the project will provide access to improved sanitation services and reduce environmental and health risks. It will be possible to mitigate temporary restrictions of access through adequate traffic management plans and advance notice.

 

The Project will not trigger any resettlement. There is a slight possibility that temporary economic displacement may occur during the connection of new customers to the expanded sewerage network. The PIU consultants will be required to ascertain the exact location of the new sewage networks and identify land take requirements. Should any temporary land take be required, the borrower will be required to develop and implement a Livelihood Restoration Plan.

 

While the current discharge of untreated wastewater into the transboundary Amudaria River and Sarykamysh Lake potentially affects biodiversity, this issue will cease once the modern wastewater treatment plants are operational.

 

The Horezm Oblast and, in particular, Khiva are rich in cultural heritage, therefore a Chance Find Procedure, a tool for the protection of unidentified cultural heritage resources, will need to be established and implemented.

 

A Stakeholder Engagement Plan will need to be implemented by the borrower to ensure stakeholders are provided with the timely information on the Project, its potential impacts, implementation of mitigation measures and benefits for the community.

Technical Cooperation and Grant Financing

Pre-singing:

TC 1: Technical, financial, environmental and social due diligence. The assignment's cost is up to €175,000, funded by Infrastructure Project Preparation Facility (IPPF).

 

Post-signing:

TC 2: Corporate Development Programme for Horezm Suvokova will be implemented as part of Horezm Water Project (Project number: 49358).

Company Contact Information

Head of PIU
po.ebrd@uzsuv.uz
+99855-503-12-55
+99855-503-12-55
http://uzsuv.uz
1 Niyozbek Yuli street, Tashkent City, 100035, Uzbekistan

PSD last updated

19 Oct 2021

Understanding Transition

Further information regarding the EBRD’s approach to measuring transition impact is available here.

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Environmental and Social Policy (ESP)

The ESP and the associated Performance Requirements (PRs) set out the ways in which the EBRD implements its commitment to promoting “environmentally sound and sustainable development”.  The ESP and the PRs include specific provisions for clients to comply with the applicable requirements of national laws on public information and consultation as well as to establish a grievance mechanism to receive and facilitate resolution of stakeholders’ concerns and grievances, in particular, about environmental and social performance of the client and the project. Proportionate to the nature and scale of a project’s environmental and social risks and impacts, the EBRD additionally requires its clients to disclose information, as appropriate, about the risks and impacts arising from projects or to undertake meaningful consultation with stakeholders and consider and respond to their feedback.

More information on the EBRD’s practices in this regard is set out in the ESP.

Integrity and Compliance

The EBRD's Office of the Chief Compliance Officer (OCCO) promotes good governance and ensures that the highest standards of integrity are applied to all activities of the Bank in accordance with international best practice. Integrity due diligence is conducted on all Bank clients to ensure that projects do not present unacceptable integrity or reputational risks to the Bank. The Bank believes that identifying and resolving issues at the project assessment approval stages is the most effective means of ensuring the integrity of Bank transactions. OCCO plays a key role in these protective efforts, and also helps to monitor integrity risks in projects post-investment.

OCCO is also responsible for investigating allegations of fraud, corruption and misconduct in EBRD-financed projects. Anyone, both within or outside the Bank, who suspects fraud or corruption should submit a written report to the Chief Compliance Officer by email to compliance@ebrd.com. All matters reported will be handled by OCCO for follow-up. All reports, including anonymous ones, will be reviewed. Reports can be made in any language of the Bank or of the Bank's countries of operation. The information provided must be made in good faith.

Access to Information Policy (AIP)

The AIP 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 following its entry into force on 1 January 2020. Please visit the Access to Information Policy page to find out what information is available from the EBRD website.

Specific requests for information can be made using the EBRD Enquiries form.

Independent Project Accountability Mechanism (IPAM)

If efforts to address environmental, social or public disclosure concerns with the Client or the Bank are unsuccessful (e.g. through the Client’s Project-level grievance mechanism or through direct engagement with Bank management), individuals and organisations may seek to address their concerns through the EBRD’s Independent Project Accountability Mechanism (IPAM).

IPAM independently reviews Project issues that are believed to have caused (or to be likely to cause) harm. The purpose of the Mechanism is: to support dialogue between Project stakeholders to resolve environmental, social and public disclosure issues; to determine whether the Bank has complied with its Environmental and Social Policy or Project-specific provisions of its Access to Information Policy; and where applicable, to address any existing non-compliance with these policies, while preventing future non-compliance by the Bank.

Please visit the Independent Project Accountability Mechanism webpage to find out more about IPAM and its mandate; how to submit a Request for review; or contact IPAM  via email ipam@ebrd.com to get guidance and more information on IPAM and how to submit a request.

 

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