Kvemo Kartli Solid Waste Project

Location:

Georgia

Project number:

45956

Business sector:

Municipal and environmental infrastructure

Notice type:

Public

Environmental category:

B

Target board date:

06 May 2015

Status:

Repaying

PSD disclosed:

25 Sep 2014

Translated version of this PSD: Georgian

Project Description

The EBRD is considering extending a sovereign loan of up to €7 million to Georgia to be on-lent to five municipalities in the Kvemo Kartli region: Marneuli, Bolnisi, Dmanisi, Tetritskaro, Tsalka (jointly the “Participating Municipalities”) and the Solid Waste Management Company of Georgia Ltd (“the Company”).

It is envisaged that the project will be co-financed by a capital grant of €3 million provided by an international donor.

The project will finance the construction of an EU compliant regional sanitary landfill and relevant infrastructure in Marneuli municipality to serve the Participating Municipalities. The project will also include acquisition of vehicles, waste containers and other equipment for waste management activities.

In addition, the project will support institutional development of the Company and the Participating Municipalities.
 

Transition Impact

Transition Impact of the project would be:

  • Introduction of tariff reform within affordability limits;
  • Extending waste collection services;
  • Improved billing and collection of waste tariffs;
  • Establishment of a contractual relationships between Participating Municipalities and the Company;
  • Improvement of operational and financial management of the Company;
  • The expected transition impact rating is ‘good’.

The Client

The Government of Georgia, the Company and Participating Municipalities.

EBRD Finance

€7 million sovereign loan to Georgia to be co-financed by a capital grant of €3 million provided by an international donor. Funds will be transferred to the Company and Participating Municipalities.

Project Cost

The total project cost is €10 million including co-financing provided by an international donor.

The project will also benefit from technical cooperation assignments to support project implementation, support corporate development of the Company and help Participating Municipalities in implementing reforms.

Environmental Impact


The project has been categorised B in accordance with the Bank's 2008 Environmental and Social Policy, following an Initial Environmental and Social Examination (“IESE”). The IESE was carried out through a site visit by the Environment and Sustainability Department (“ESD”), which confirmed that the potential adverse impacts from the Project would be localised and be readily addressed through careful design, the implementation of mitigation measures and appropriate management practices. The environmental and social due diligence (“ESDD”) carried out by independent consultants covered a review of the environmental and social management practices and existing facilities and operations of the solid waste management company, and an Environmental and Social Analysis of the Project.

The ESDD showed that the existing waste management practices and facilities are poor and not in compliance with the relevant EU standards and the EBRD Performance Requirements (“PRs”). At present, solid waste is disposed of at six official dumpsites managed by the Company and 26 additional ad hoc existing dumpsites within the Kvemo Kartli region. The operations on these dumpsites do not meet basic environmental, health and safety standards. Also, health and safety standards for the workers performing waste collection and landfill operations are low.

The construction of a new landfill which will comply with design requirements of the EU Landfill Directive will bring substantial environmental, health and safety benefits through the rehabilitation of waste collection, transportation, and disposal services; increased operational efficiency, and improved environmental and hygiene standards.

The natural conditions beneath the new landfill site provide a low permeability clay barrier and limited groundwater of low quality. This, in conjunction with the proposed construction of an engineered clay barrier and High Density Polyethylene (“HDPE”) liner, providing a double lined landfill, should result in a low risk of impact to groundwater and compliance with the EU Landfill Directive.

The project will result in subsequent closure of the official dumpsites maintained by the Solid Waste Management Company. Closure of these sites will result in significant benefits for not only public and worker health and safety but also the environment. Closure of the dumpsites will not be financed by the EBRD but will be required under the financing agreements.

While the Project will significantly improve the waste collection, transportation, and disposal services, further investments would be needed to achieve compliance with EBRD PRs and EU Directives with respect to waste recovery and recycling. Therefore, given the limited financial resources and affordability constraints, the project will require derogation from the 2008 Environmental and Social Policy (“ESP”).

An ESAP has been prepared to address the identified environmental and social issues and impacts during preparation, construction and operation of the project to structure the Project to meet EBRD Performance Requirements. The ESAP requirements include:

  • Undertaking a local EIA for the project in line with national legislative requirements and guidelines to obtain permits for the construction on the New Landfill.
     
  • Further assessment of traffic impacts and affordability of waste tariffs.
     
  • Develop an H&S management system to include company policy, requirements for risk assessments, preventative measures including Personal Protection Equipment, training, regular inspection, documentation and reporting, emergency prevention, preparedness and response.
     
  • Develop a comprehensive Environmental and Social Management Plan (“ESMP”), including all mitigation and pollution prevention and monitoring measures, and all Plans, Procedures and Protocols to be prepared, approved and implemented.
     
  • Identify and evaluate the risks and potential impacts to the health and safety of the affected community during the design, construction, and operation of the project. These impacts should then be mitigated by the client. 
     
  • Disclose the Stakeholder Engagement Plan (“SEP”), inclusive of the grievance mechanism, and implement and regularly update the plan.

The ESAP will need to be agreed with the Client before signing. The Company will provide the Bank with annual environmental and social reports, including updates on the implementation of the ESAP. The Bank will conduct monitoring visits, as required, and commission a completion audit.

Technical Cooperation

The following technical co-operation (“TC”) assignments are included as part of this project:

Pre Loan Signing

  • TC 1: Feasibility Study for the Project including financial and technical due diligence, and preparation of engineering design of the landfill and relevant infrastructure. EUR 280,000, financed by the Government of Sweden.
     
  • TC 2: Environmental and Social Due Diligence. EUR 75,000, financed by the Bank’s own resources.
     
  • TC 3: Audit and restatement of Company’s accounts. EUR 18,420, financed by the Bank’s own resources.

Post Loan Signing

  • TC 4: Project Implementation Support to assist the Project Implementation Unit in procurement, preparation and evaluation of tenders, contract award and administration, financial control, project management and reporting. EUR 600,000, to be financed by the Government of Sweden.
     
  • TC 5: Corporate Development, Stakeholder Participation and Municipality Support Programme. EUR 500,000, to be financed by the Government of Sweden.
     
  • TC 6: Environmental Impact Assessment to (i) complete the additional baseline studies and assessments required under the Environmental and Social Impact Assessment (“ESIA”); and (ii) prepare the local EIA for the approval of the national authorities. EUR 30,000, to be financed by the Government of Sweden.
 

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

Project Complaint Mechanism (PCM)

The Project Complaint Mechanism (PCM) is the EBRD's accountability mechanism. It provides an opportunity for an independent review of complaints from individuals and organisations concerning EBRD-financed projects which are alleged to have caused, or are likely to cause, environmental and/or social harm.

Please visit the Project Complaint Mechanism page to find information about how to submit a complaint. The PCM Officer (pcm@ebrd.com) is available to answer any questions you may have regarding the submission of a complaint and criteria for registration and eligibility, in accordance with the PCM Rules of Procedure.