KR Water Framework-Myrzaki-Kurshab Regional Water

Location:

Kyrgyz Republic

Project number:

48036

Business sector:

Municipal and environmental infrastructure

Notice type:

Public

Environmental category:

B

Target board date:

06 Nov 2018

Status:

Signed

PSD disclosed:

23 Apr 2019

Translated version of this PSD: Russian

Project Description

The provision of a loan of up to €2 million to the joint municipal enterprise Water Supply and Wastewater Management Agency of the Uzgen Region (the Company). The Company is equally owned by three municipalities of Myrzaki, Kurshab and Don-Bulak (the Municipalities) and provides drinking water supply services in the Municipalities.

The financing plan also includes an investment grant of € 3 million from the EU's Investment Facility for Central Asia (IFCA) to facilitate thew implementation of the project.

The proceeds of the loan and the grant will finance the most urgent water supply rehabilitation works.

The project will focus on replacing critical water supply networks, rehabilitating water supply systems and modernising household metering and operational and maintenance equipment. The investments are expected to significantly improve access to clean water, reduce water losses, improve resilience to climate change and optimise the Company's operating costs.

Project Objectives

The rehabilitation of the water supply infrastructure in the municipalities of Myrzaki, Kurshab and Don-Bulak and the improvement of the Client's financial and operational management.

Transition Impact

Strong Good

The project's transition impact includes:

  • Improved standards of transparency and governance via the introduction of a Public Service Contract;
     
  • Development of a tariff methodology and associated tariff amendments to achieve cost recovery and increased collection rates;
     
  • Building the water supply company's capacity through the preparation of a business plan and FOPIP, the application of IFRS, implementations of an MIS, reduction of cross subsidies and the increase in water meter coverage to enhance management information.
     
  • Introduction of a formal consultation process with water supply service users in the form of a community-based stakeholder participation programme.

The project is expected to significantly improve the efficiency, reliability and quality of water supply, contributing to the provision of uninterrupted access to safe drinking water, prevention of ground and
watercourse pollution and public health improvements.

Client Information

KYRGYZ REPUBLIC SOVEREIGN

Joint municipal enterprise Water Supply and Wastewater Management Agency of the Uzgen Region The Company was established in September 2016 and is equally owned by the municipalities of Myrzaki, Kurshab and Don-Bulak. The Company provides drinking water supply services in the municipalities. The Company has 12,180 registered customers as of 2018, forecasted to grow to 33,461 by 2022 and 43,045 by 2033 as a result of the investment project and the annual population growth.

EBRD Finance Summary

EUR 2,000,000.00

€2 million to the Client under a sovereign guarantee.

Total Project Cost

EUR 5,000,000.00

Up to €5 million.

Environmental and Social Summary

The Project is categorised B under the 2014 Environmental and Social Policy. The Environmental and Social Due Diligence (ESDD) has been carried out by independent consultants. The ESDD confirmed that the implementation of the Project will significantly increase access to safe drinking water by improving the efficiency and reliability of water supply services. Any adverse impacts will be limited, localised and temporary, and it will be possible to prevent or mitigate them by adhering to good construction practices.

The ESDD showed that the Company has insufficient environmental, health, safety and social (EHSS) management capabilities and underdeveloped EHSS management systems, and that its current occupational health and safety and stakeholder engagement practices require further improvement to meet the EBRD's Performance Requirements (PRs). The Company's facilities are currently in a poor operational condition, which translates into unreliable and low-quality water supply, high water losses and energy consumption.

Despite all the improvements to be delivered by the project, further investments would be needed to achieve compliance with the EU standards in terms of drinking water quality.

The Company will provide the Bank with annual environmental and social reports, including updates on the implementation of the Environmental and Social Action Plan. The Bank will conduct monitoring
visits, as required, and commission a completion audit.

Technical Cooperation

The following technical cooperation (the TC) assignments are envisaged as part of this project:

Pre Loan Signing

  • Technical due diligence to support scoping and structuring of the project, financial analysis and an environmental and social assessment (€200,650 financed by the EBRD's Infrastructure Project Preparation Facility).

Post Loan Signing

  • Project Implementation Support. International consultant to support the Project Implementation Unit with detailed engineering design and approval, procurement, preparation and evaluation of tenders, contract award and administration, financial control, project management and reporting.

    The assignment's cost is estimated at up to €600,000, to be financed by IFCA;
     
  • Corporate Development Support Programme. The assignment's cost is estimated at up to €400,000, to be financed by IFCA.

Company Contact Information

Mr. Kalbaev Zhumanazar Nurkamilovich
Zhumanazar.Kalbaev64@mail.ru
+996 774 760 820
Kyrgyz Republic, Osh region, Uzgen rayon, Bakmal village, I.Zhusupov Street, #26

Business opportunities

For business opportunities or procurement, contact the client company.

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Text of the PIP

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