Karabalta Water Rehabilitation Project

Location:

Kyrgyz Republic

Project number:

42007

Business sector:

Municipal and environmental infrastructure

Notice type:

Public

Environmental category:

B

Approval date:

27 Apr 2012

Status:

Repaying

PSD disclosed:

07 Feb 2012

Translated version of this PSD: Russian

Project Description

The EBRD is considering supporting the Karabalta Water Rehabilitation Sub-Project. The EBRD would extend a loan with a sovereign guarantee of up to €2 million to the Kyrgyz Republic, to be on-lent to the Karabalta Water Company for improvement of water supply and wastewater services.

The EBRD will also seek an investment grant from an international donor of €3 million to facilitate implementation of the project which will address urgently needed water and wastewater infrastructure rehabilitation needs.

This support will be extended under the existing EBRD sovereign framework of up to €20 million, established by the Bank to co-finance with international donors priority water and wastewater rehabilitation sub-projects across the Kyrgyz Republic. The framework envisages sovereign loans that would be on-lent to the water companies involved as appropriate and would address urgently needed water and wastewater infrastructure rehabilitation needs.

Transition Impact

Transition Impact of the sub-project would be:

  • Access to basic public utilities;
  • Introduction of tariff reform within affordability limits;
  • Increased collection rates;
  • Establishment of a contractual arrangement between the city and the company;
  • Improvement of operational and financial management of the Karabalta Water Supply company (including a community based shareholder participation programme, preparation and publication of IFRS and business plan, training on procurement, etc).

The Client

Government of the Kyrgyz Republic, with on-lending to the Karabalta Water Company.

EBRD Finance

The proposal is for a loan of up to €2.0 million to the Kyrgyz Republic, on-lent to the Karabalta Water Company.

Project Cost

The total sub-project cost is €6.4 million including technical cooperation. The sub-project will be co-financed by an investment grant from an international donor.

Environmental Impact

The project has been categorised B under the EBRD Environmental and Social (E&S) Policy. An Environmental and Social Audit/Review of current E&S management practices, operations and facilities, and an Environmental and Social Analysis of the proposed Priority Investment Programme (PIP) is underway as part of the Feasibility Study, by independent consultants.

Based on the initial results of the due diligence, it can be concluded that the implementation of the proposed PIP is expected to significantly improve efficiency, reliability and quality of water supply and wastewater collection and treatment in Karabalta, thus contributing to the provision of uninterrupted access to safe drinking water, prevention of ground and watercourse pollution and improvement of public health.

The PIP components will mainly involve the renovation of the existing water distribution, wastewater collection systems and water treatment plants. Any adverse future environmental and social impacts associated with the Project are site-specific and readily addressed through adequate mitigation measures. The implementation of the PIP involves construction works that will result in limited, localised and short-term adverse environmental impacts, which will be mitigated or prevented by adhering to good construction practices.

The due diligence investigations showed that the existing water companies have weak Environment, Health, Safety, and Security management capabilities and that their current occupational health and safety and stakeholder engagement practices require further improvement to meet EBRD's Performance Requirements (PRs).

Once the E&S due diligence for the project is completed, this PSD will be amended to include further information about potential E&S issues associated with the project and the Environmental and Social Action Plan (ESAP), which is under preparation to bring the new water company into compliance with national regulations and to meet EBRD's PRs, where financially feasible.

Technical Cooperation

Pre-signing

  • Feasibility Study for Karabalta Water Supply sub-project: including financial, technical, environmental and social due diligence, of the proposed investment, operational review and recommendations for improvements. (€344,850, with funding provided by the EBRD Water Fund and the Bank’s own resources).
  • IFRS Audit for the two Water Companies, including Restatement, Consolidation and Audit Services (US$ 33,250, with funding provided by the Bank’s own resources).

Post Loan Signing

  • Sub-Project Implementation Support. International consultants to assist the sub-project implementation unit with engineering design, procurement, preparation and evaluation of tenders, contract award and administration, financial control, sub-project management and reporting. (€350,000 to be financed by an international donor).
  • Corporate Development and Stakeholder Participation Programme to

    (i) support institutional development in the form of operational improvements and financial improvements to secure sustainability of the water utilities; and

    (ii) implement a Stakeholder Participation Programme. (€350,000 to be financed by an international donor).
 

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

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