Translated version of this PSD: Russian
The EBRD is considering providing financing for a programme of priority capital investments to improve the solid waste management services in Kurgan-Tyube city. Proceeds from this transaction will support an investment programme aimed to
(i) improve landfill sanitary/operating standards and
(ii) increase efficiency/coverage of solid waste operations in Kurgan-Tyube.
The transition impact of this project is expected to include:
- Application of the cost recovery principles (within affordability limits) through the formation of a new tariff methodology;
- Increased collection rates;
- Development and signing of a public service agreement I between the City and the project company;
- Improvements to the operational and financial management of the project company, together with enhanced transparency and corporate governance;
- Implementation of a stakeholder participation programme.
State Unitary Communal Enterprise “Khojagii Manziliy Kommunali” (“KMK”) of Kurgan-Tyube City.
The EBRD will provide a sovereign guaranteed loan of up to US$ 2 million to SUE KMK of Kurgan-Tyube.
Up to US$ 5.3 million including investment and technical cooperation grants. The project will be co-financed by an investment grant from an international donor.
The project has been categorised B. Potential adverse future environmental and social impacts associated with rehabilitation of waste collection, transportation, recycling and disposal services in Kurgan Tyube and the surrounding area, closure of the existing dumpsites and rehabilitation and extension of the existing landfill are likely to be site-specific. These can be readily identified and addressed through adequate mitigation measures.
The project will bring substantial environmental, health and safety benefits to the city of Kurgan-Tyube and the surrounding communities through the rehabilitation of waste collection, transportation, and disposal services; increased operational efficiency, and environmental and hygiene standards. However, due to the budgetary and financial constraints, the waste management system to be introduced will not fully comply with the relevant EU environmental standards related to waste recovery, recycling and re-use). Therefore, the project was approved with derogation from the Environmental and Social Policy by EBRD Board of Directors.
The Environmental and Social Due Diligence (ESDD) included an independent environmental and social audit of the Company's current operations and facilities, and an analysis of potential environmental and social issues associated with the proposed PIP. The Company's environmental and social management capabilities were also reviewed and assessed, as well as tariff affordability issues, resettlement, livelihood and gender-related impacts.
Currently, solid waste is transported to a dumpsite located 25 km from the city. The Company has also been using a dump site located within the city, which sits on top of an abandoned clay pit. The Project covers rehabilitation and extension of only the dumpsite outside the City. The closure of the dumpsite within the City will be the City's responsibility taken under the Project Support Agreement and ESAP. As part of the closure, all the waste from the city dump will be transported to the dumpsite outside the City over a period of 3 years.
The results of the ESDD confirm that the existing waste management practices and facilities are very poor and not in compliance with the EBRD Performance Requirements and, specifically, the current EU standards. The dumpsites are being operated with insufficient technical equipment and the operation does not comply with basic environmental and health standards. Also, due to the lack of personal protective equipment, health and safety standards for the workers performing waste collection and landfill operations are low. However, the investigations indicate that if adequate technical and operational measures are implemented, the area of the existing dumpsite outside the City can be used for future extension without significant risks to human health and environment pollution.
The initial due diligence estimated that 11 families live on, or adjacent to, the dumpsite within the city. In actual fact only two recently constructed structures are in the middle of and on the waste, with the other houses being of a more substantial nature and not having been built on the waste. A resettlement framework has been prepared with a resettlement action plan being currently prepared. This will be a two stage process; initially there will be resettlement of the two houses as soon as the Project support consultants are in place, and then resettlement of the other houses later, depending upon their structure and foundations. The City wants to re-establish this as a green space/residential area. There are approximately 20 people who are currently engaged in the collection of secondary material on the site outside of the City. It has been agreed with the waste company that they will be provided with work and this is reflected in the ESAP. The site within the City is to be cleared within 3 years of loan effectiveness.
Tariffs are to be increased as part of the cost recovery programme but these will remain below the 2.5 per cent of average disposal incomes for most of the projected period. For the years when the tariffs are above this threshold, the City is expected to administer targeted subsidies to the lowest income families. These activities will be supported by the corporate development consultants.
An Environmental and Social Action Plan (ESAP) has been developed for mitigation of identified E&S issues and impacts during preparation, construction and operation of the project including the following main areas: development and implementation of EHS management systems; remediation of the City Dump in compliance with the mitigation measures defined under the ESAP; establishment of good EHS management practises for waste collection and disposal activities (optimised landfill gas and leachate collection, noise minimisation, avoidance of littering, birds, vermin, use of PPEs, site security and access control, etc.); monitoring requirements; customer relations; HR issues (salary scales, recruitment, organisation structure, internal grievance mechanisms, etc.); implementation of the RAP; chance find procedures.
The Company will provide the Bank with annual environmental and social reports, including updates on the implementation of the ESAP and resettlement action plan. The Bank will conduct monitoring visits, as required, and commission a completion audit.
The following technical co-operation (“TC”) assignments are a part of this project:
1. Feasibility Study
US$ 370,000 (€290,000) feasibility study financed by EU Investment Facility for Central Asia (IFCA) will, among other things, (a) prepare a plan and cost estimates for improving waste collection and the disposal capacity of the landfill, (b) assess the options for landfill facility upgrade, (c) review operations and recommend improvements and (d) prepare a strategic and operational business plan to enable Kurgan-Tyube KMK to extend the collection services;
1. Project Implementation Support
International consultants will assist the Project Implementation Unit with engineering design, procurement, contract administration, engineer’s supervision, financial control, project management and reporting. US$ 500,000 (€390,000), proposed to be financed by an international donor or the ETC Fund.
2. Corporate Development, Stakeholder Participation and City Support Programme
Consultants will be hired to support operational and financial improvements to secure sustainability of the Company operations, implement a Stakeholder Participation Programme, and introduce a Public Service Contract between the Company and the City. US$ 440,000 (€342,000), proposed to be financed by an international donor or the ETC Fund.
For business opportunities or procurement, contact the client company.
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Text of the PIP
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