Kashkadarya Wastewater Project

Location:

Uzbekistan

Project number:

50525

Business sector:

Municipal and environmental infrastructure

Notice type:

Public

Environmental category:

B

Target board date:

13 Nov 2019

Status:

Passed Final Review, Pending Board Approval

PSD disclosed:

13 Feb 2019

Translated version of this PSD: Russian | Uzbek

Project Description

The provision of a sovereign loan of up to US$ 60 million (€53.5 million) to the Republic of Uzbekistan for the benefit of the State Unitary Enterprise Kashkadarya Suvokova (the "Company") to finance the rehabilitation of Kashkadarya Oblast's wastewater infrastructure (the "Project").

Project Objectives

The Project is expected to increase the number of people connected to the wastewater network by 50,000, and the volume of wastewater treated to EU standards by 13.7 million m3 per year.

Transition Impact

Primary Quality – Green. Through improvements in wastewater infrastructure, the Project is expected to enhance resilience to climate change, contribute to sustainable and efficient water use, as well as increase the number of people connected to the wastewater network;

Secondary Quality – Resilient. The Project will focus on financial and operational improvements to secure operating and maintenance cost recovery and contribute to sustainability of infrastructure assets.

Client Information

UZBEKISTAN SOVEREIGN
 

EBRD Finance Summary

USD 60,000,000.00

Total Project Cost

USD 72,000,000

Environmental and Social Summary

Categorised B (ESP 2014). The Project involves the replacement and construction of sewer networks, wastewater pumping stations and a major reconstruction of the existing wastewater treatment plans (‘WWTP’) in the city of Karshi. The expanded capacity is expected to be 37,400 m3/day, designed to serve 125,000 new customers by 2034 taking into account the predicted population growth. The WWTP’s expansion will take place within the existing brownfield industrial site.

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 are practically out of service due to their age and the prolonged lack of maintenance and repairs. This situation poses significant environmental and health risks due to the discharge of untreated wastewater into the environment. 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 and the GET share is 100 per cent.

Potential environmental and social impacts will be site-specific, and it will be possible to mitigate them by implementing the Construction Environmental and Social Management Plans and other contractors’ management plans. There will be temporary impacts during the construction associated with the increased dust and noise levels, disposal of waste 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. The construction labour force requirements have not been yet 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 WWTP may potentially trigger retrenchment of the low-skilled and unskilled labour and will need to be properly managed. A workers’ grievance mechanism will be required and made available to the entire 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. Temporary restrictions of access will be readily mitigated by adequate traffic management plans and advance notice.

The Project will not require 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.

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

Technical Cooperation

Pre-signing:
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 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

Aziz Erkaboev
a.erkaboev@mjko.uz
+998 71 235-85-79
http://mjko.uz
1 Niyozbek Yuli street, Tashkent City, 100035, Uzbekistan

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