Kazakhstan Waste Management Framework

Translated version of this PSD: Russian

Project Description

The EBRD is considering establishing a Kazahkstan Waste Management Facility which would provide the Bank with an instrument to extend its financing for waste-to-energy projects in Kazahkstan.

The two main objectives of the Facility will be:

• to provide financing and technical assistance for the realisation of waste-to- energy projects, which will demonstrate the benefits of energy recovery from waste in conjunction with the introduction of modern waste management approaches;
• to encourage and support policy dialogue and institutional capacity building in respect of a modern waste management framework, in order to foster the development of a favourable environment for the implementation of such projects in Kazahkstan.

The Facility will consider all forms of waste-to-energy.

Concessional co-financing from the Clean Technology Fund (CTF) is anticipated to be available to cover up to 20 per cent of project eligible costs.

Transition Impact

The project is part of the CTF Investment Plan for Kazakhstan and carries the promise of high additionality, transformational impact and replicability.

Although the transition impact will be significantly different by sub-operations, the framework aims at addressing following transition challenges:

Regulatory capacity improvements: Part of the funds will be used to support dialogue with the government on adoption of new legislation to support renewable energy sources, as well as in building the necessary institutional capacity for implementation both at the project level and within the enabling institutions such as the regulator.

This will create a proper framework for the development of waste-to-energy projects in Kazakhstan and will help the country in its much needed efforts to reduce the environmental impact of energy production and waste disposal.

Establishment of Public Service Contracts: each sub-project will formulate a public service contract, defining key incentives and obligations, between the municipality and the company.

Demonstration of replicable products: sub-operations will support development and financing of some of the first energy-from-waste projects in Kazakhstan.

Private sector participation: where possible, the Bank aims to develop the environmentally friendly waste management under the public-private-partnerships (PPP).

The Client

Companies developing waste-to-energy projects in Kazakhstan.

EBRD Finance

Up to € 80 million financing

Project Cost

Up to € 100 million, of which € 20 million will be provided by the CTF.

Environmental Impact

In Kazakhstan, almost all municipal waste is disposed of at poorly managed landfills or city dumps which lack basic sanitary and environmental measures. The existing capacity of legal landfills is not sufficient to handle the growing quantities of waste. The national technical standards for landfills are not in compliance with EU or international standards as no proper lining and leachate collection/treatment systems are required, which poses risk for soil and groundwater contamination. The Framework will be a significant step to the improvement of the solid waste sector organisation and management in Kazakhstan.

The Framework itself is not categorised under the 2008 E&S Policy; however, each sub-project will be categorised. Typically, the sub-projects are likely to have potentially significant and diverse adverse future environmental and social impacts and, therefore, each sub-project would be categorised A, requiring an ESIA and associated public consultation.

Each sub-project will be required to be appraised, managed and monitored in accordance with the requirements of the Bank's ESP and PRs. The framework covering due diligence and stakeholder engagement requirements for each sub-project will be agreed . For each category A sub-project, the ESIA will need to be disclosed to public for 60-day period before final decision is sought from the Board.

The Bank will require an E&S audit of the existing operations and facilities of each SPC to assess their current ES management systems and past and current performance against relevant PRs. The audit will

i) assess the SPCs' ability to manage and address all relevant social and environmental risks and impacts of their business and operations, in particular the issues identified in the PRs

ii) assess their compliance with national laws and regulations, including host country obligations under international law, and

iii) identify the SPCs' main stakeholder groups and current stakeholder engagement activities.

Environmental and Social Action Plan (ESAP) will be prepared for each sub-project. The participating companies will also be required to develop a Stakeholder Engagement Plan, including a grievance mechanism, and release information on environmental and social performance and a summary of the agreed Action Plan to stakeholders.

To date, two initial sub-projects in Aktau and Almaty for constructing new waste management facilities have been categorised A, and the Environmental and Social Impact Assessments are currently on-going.

This PSD and separate PSDs for each specific sub-project will be amended and updated with specific information once the results of due diligence on each of the sub-projects become available.

Technical Cooperation

The Facility will be supported by a comprehensive technical assistance programme designed to provide both institutional and project support, financed by the Clean Technology Fund and bilateral donors.

The EBRD will utilise Korean donor funds to support the regulator with the development of a strategy and required legislation in order to present a workable framework for the support of modern waste management in Kazakhstan.

In addition the EBRD will establish a pipeline of projects which would be suitable to be financed under a dedicated financing facility. This will include a list of all known project proposals, indicating the sponsor, project description, projects status and required investment, also an indicative initial assessment of the viability of each project and their readiness to proceed.

 

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