Horezm Water Project

Location:

Uzbekistan

Project number:

49358

Business sector:

Municipal and environmental infrastructure

Notice type:

State

Environmental category:

B

Approval date:

19 Sep 2018

Status:

Disbursing

PSD disclosed:

22 Oct 2021

Project Description

The provision of a sovereign loan of up to US$ 60 million (€50 million) to the Republic of Uzbekistan to be on-lent and/or granted to the water utility Limited Liability Company Xorazm Suv Ta'minoti, formerly known as the State Unitary Enterprise Horezm Suvokova to finance the Company's Priority Investment Programme (PIP). The PIP includes such investments in water and wastewater infrastructure of Khoresmoblast as the construction of new water intakes and renewal of pumping stations, water and wastewater treatment facilities, and the installation of household and bulk meters. These components are aimed at improving water quality, access to safe drinking water and wastewater treatment services.

Project Objectives

The Project is expected to increase the number of people connected to the water and wastewater network by around 200,000 people, reduce water losses, enhance energy efficiency and quality of wastewater treatment.

 

Transition Impact

ETI score: 61

The sources of transition impact are:

1) Green. The Project is expected to increase the number of people connected to water and wastewater network, reduce water losses and enhance the energy efficiency. The Project qualifies as a positive environmental activity.

2) Resilient. The Project will focus on financial and operational improvements to achieve cost recovery and sustainability of the Company.

Client Information

UZBEKISTAN SOVEREIGN

EBRD Finance Summary

USD 60,000,000.00

Total Project Cost

USD 72,000,000.00

Environmental and Social Summary

The Project has been categorised B in accordance with the EBRD's 2014 Environmental and Social Policy. The Environmental and Social Due Diligence (ESDD) for the proposed Priority Investment Programme (PIP) for the Project was carried out as part of the Feasibility Study by independent consultants engaged under the IPPF. It included a review of current practices, an assessment of the Project's potential E&S impacts and a review of the Company's current E&S provisions and management capacity. The PIP for the Horezm region is designed to achieve compliance with the national drinking water and wastewater quality standards, the EU Drinking Water Directive and Urban Waste Water Treatment Directive and the EBRD PRs. All PIP components will be subject to local permitting procedures and EIA law (OVOS) in the future. An Environmental and Social Action Plan (ESAP) has been developed for the Project and will be agreed with the Company under a separate Project Agreement prior to Board approval. Stakeholder Engagement Plans (SEP) and a non-technical summary (NTS) have also been developed and will be disclosed.

 

The Company operates in line with the requirements of the local environmental authorities which at times differ from the national legislation. Non-compliances will be addressed with corrective measures in the ESAP.

 

Currently 52 per cent of the Horezm oblast's population is provided with centralised water supply system, mostly only for 8-10 hours a day. Water is abstracted from two surface water intakes. Only 8 per cent of the region's population is connected to the centralized sewage system. Both systems in the Horezm oblast are old and in an extremely poor condition, which results in: low service reliability, water losses, non-existent waste water treatment process due to the deteriorated conditions of the three WWTPs, deteriorating working conditions for pumping station employees, an increasing accident rate.

 

To ensure the required degree of treatment the project provides for multi-stage, mechanical and biological treatment of incoming wastewater. The Project also assumes dehydration, post-treatment and maturing of the sludge. Tertiary treatment for nutrient removal is not required in line with the EU Urban Waste Water Treatment Directive, based on the capacities of the WWTPs and absence of sensitive receptors.

 

ESDD has concluded that through connection of new customers to the wastewater system, accounting for and controlling the quality of wastewater entering the system, improvement of the wastewater treatment process (currently non-existent), the Project will reduce sanitary and epidemiological risks and adverse impacts on the environment and on water bodies. Reconstruction of the existing WTP will result in decreased H&S and environmental risks related to use of liquid chlorine, while allowing for connection of at least 150,000 people and increased reliability. Construction of underground water intakes will require relevant permits, but the aquifers are well studied, as they have been used in the past. Adverse E&S impacts associated with the implementation of the PIP will be limited, localized and temporary, and can be prevented or mitigated by adhering to good construction practices.

 

The affordability assessment carried out by the Feasibility Study Consultant did not identify significant water tariff affordability concerns from the implementation of the Project.

 

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: increasing the Company's EHS capacity and development of EHS procedures in respect of main EHS risks, development of HR policies, improvement of worker grievance mechanism, development of a contractor EHS and labour management programme; improved water supply and wastewater quality monitoring; development of a CESMP for contractors implementing the PIP; and implementation of the SEP together with a public grievance mechanism.

 

The Bank will monitor the implementation of the Project and the ESAP as well as the Company's environmental and social performance by reviewing the Company's annual environmental and social reports and undertaking monitoring visits as needed.

 

Technical Cooperation and Grant Financing

Pre-signing:

  • TC 1: Technical, financial, environmental and social due diligence. The assignment's cost was €200,000, funded by Infrastructure Project Preparation Facility (IPPF).

 

Post-signing:

  • TC 2: Corporate Development Support  to the Company to enhance its institutional, operational and financial capacity. The assignment's cost is estimated at €200,000, to be financed by an international donor or the EBRD Shareholder Special Fund.

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

22 Oct 2021

Understanding Transition

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

Business opportunities

For business opportunities or procurement, contact the client company.

For business opportunities with EBRD (not related to procurement) contact:

Tel: +44 20 7338 7168
Email: projectenquiries@ebrd.com

For state-sector projects, visit EBRD Procurement:

Tel: +44 20 7338 6794
Email: procurement@ebrd.com

General enquiries

Specific enquiries can be made using the EBRD Enquiries form.

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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