Mitrovica Wastewater Development Project

Location:

Kosovo

Project number:

50458

Business sector:

Municipal and environmental infrastructure

Notice type:

State

Environmental category:

B

Approval date:

25 Mar 2020

Status:

Passed Final Review, Pending Approval

PSD disclosed:

25 Sep 2018

Project Description

Provision of a sovereign loan of up to EUR 15.6 million to the Government of Kosovo for the regional water company Mitrovica ("RWCM" or the "company") to finance a proportion of the extension and rehabilitation of the wastewater collection network and construction of a new wastewater treatment plan ("WWTP"). The loan will address critical wastewater treatment needs in the municipality of Mitrovica, the municipality of Vushtry and connecting neighboring municipalities and will benefit an estimated 211,000 inhabitants. The project will be co-financed with the European Investment Bank ("EIB").

Project Objectives

The financing will enable the company to rehabilitate, upgrade and extend its wastewater network, and construct a new centralised WWTP in order to collect and treat the wastewater to the relevant EU environmental standards. The implementation of the project will result in significant environmental benefits to local freshwater resources by considerably reducing the volumes of raw wastewater and associated pollutant loads that will be discharged straight into the river. The project is expected to increase the number of people connected to the sewage network in the service area of the company.

Transition Impact

ETI score: 61

The sources of transition impact are:

1) Green. The project is expected to increase the number of connections to the wastewater network and achieve compliance with EU environmental standards for the treatment of wastewater. The project fully supports the Bank's Green Economy Transition approach by financing investments that result in environmental benefits and mitigate the effects of climate change.

2) Well-governed. The Bank will mobilise technical assistance to improve the existing Public Service Contracts ("PSCs") between the company and the municipalities it serves. The project will also support improvements of corporate governance via a Financial and Operational Improvement Programme (FOPIP) with the objective of raising managerial performance.

Client Information

MITROVICA JSC

RWCM is a joint stock company, wholly owned by the Government. The company manages and operates the water and wastewater systems in seven municipalities (Mitrovica North, Mitrovica South, Skenderaj, Vushtri and Zvecan) serving approximately 30,000 households, covering a service area with a population of around 211,000.

EBRD Finance Summary

EUR 15,600,000.00

A sovereign loan to the Government of Kosovo to be on-granted to the RWCM.

Total Project Cost

EUR 38,050,000.00

Environmental and Social Summary

Categorised B in accordance with the EBRD's Environmental and Social Policy 2014. The Environmental and Social Due Diligence (ESDD) for the Project was carried out as part of the Feasibility Study by independent consultants. It included a review of current practices, an assessment of the Project's potential Environmental and Social (E&S) impacts and a review of the Company's E&S management systems and capacities. The Project is designed to achieve compliance with national and EU wastewater treatment standards and the EBRD Performance Requirements (PRs). An Environmental and Social Action Plan (ESAP) has been developed for the Project. A Stakeholder Engagement Plan (SEP) and a non-technical summary (NTS), including outline of key environmental mitigation and management measures, have also been developed and will be disclosed by the Client locally on its website.

 

The Project will provide substantial environmental and health benefits compared to the existing situation by improving the wastewater management services in the Municipality of Mitrovica and Municipality of Vushtrri through the construction of a new wastewater treatment plant (WWTP) with the capacity of 123.000 P.E. (Phase 1) and replacement, upgrading and new construction of urban and rural sewers and interceptors in Mitrovica and Vushtrri and several neighbouring communities. There are no centralized wastewater systems currently in the rural settlements, and the untreated wastewater is currently being discharged directly into the Ibar and Sitnica rivers and eventually into the Danube. The Project will result in a significant reduction in pollution of the local water resources due to improved wastewater collection and treatment. The Project will result in 6.7 million m3 wastewater treated per year after Phase I. The total population benefitting from improved access to wastewater services will be 213,000 people, with additional 30,000 citizens that will be connected to the wastewater network. Future Phase II, which is not part of the current Project, is anticipated to increase the total capacity of the WWTP to 146.430 PE and introduce enhanced nutrient removal.

 

The Project is not expected to have significant impact on biodiversity due to the use of mainly agricultural land. The location of the Project is neither within nor in the vicinity of any protected area of high ecological value, and no sensitive areas are involved. The affordability assessment carried out by the consultant did not identify significant wastewater tariff affordability concerns from the implementation of the Project.

 

The project involves permanent land acquisition (approximately 3.8 ha of privately owned agricultural land plots affecting 10 persons) for the purpose of construction of the WWTP and the access road on the site.  This will give rise to economic displacement of a concrete plant which will need to be relocated. A Land Acquisition and Livelihood Restoration Framework (LALRF) in line with the national legislation and EBRD PR5 has been prepared and will be disclosed prior to Board for the Project, including an entitlements matrix, public consultation and grievance mechanism. The Project's land acquisition process is not progressed enough to develop a Land Acquisition and Livelihood Restoration Plan, so this needs to be prepared ahead of actual implementation of the land acquisition and construction activities for the Project, as required by the ESAP. Post-signing implementation assistance will be provided to the Client to support overall ESAP implementation, including LALRP preparation. 

 

Any adverse impacts will be localised and temporary, and prevented or mitigated by adhering to good construction practices. The identified impacts include noise, air pollution/dust, restricted access to buildings and roads, possible effect of vibration on buildings, soil and landscape disturbances during excavation works, debris, spoils, and traffic congestion. All potential adverse impacts can be managed through appropriate mitigation measures. Emergency response plan will be in place to handle accidental pollution and/or natural disasters.

 

The Water Company has no proper environmental and social management system and lacks competent Environmental, Health and Safety (EHS) staff at the corporate level. Establishment of an effective Environmental and Social Management System (ESMS) is required to ensure that the Company implements the Project in line with the national environmental requirements and EU urban wastewater standards.

 

The ESAP requires the Company to implement a number of improvements designed to meet the EBRD's PRs. The key ESAP actions are related to: increasing the Company's EHS capacity and development of EHS procedures relating to the main EHS risks; produce design documents and prepare local ESIA for the permitting procedure; obtaining construction permits for WWTP and the collector pipes and effluent discharge permit; development of HR policies and procedures; improvement of worker grievance mechanism; development and implementation of LALRP prior to construction; development of construction phase E&S management and monitoring plan; excavation and trench Occupational Health and Safety (OHS) procedures; improved waste water quality monitoring and laboratory facilities; commitment to implementation of the enhanced nutrient removal under Phase II WWTP; odour management at the WWTP premises; sludge management and disposal planning; implementation of the SEP together with a public grievance mechanism.

 

The Bank will monitor the implementation of the Project and the ESAP as well as the Company's environmental and social performance by reviewing the Company's annual environmental and social reports and undertaking monitoring visits as needed.



Technical Cooperation and Grant Financing

Pre-signing:

  •  TC1 - Gap Analysis of the Feasibility Study, including environmental and social due diligence. The assignment's cost is EUR 58,500, co-funded together with the EIB.

Post-signing:

  • TC2 - Procurement and Implementation Assistance to the PIU, including procurement, supervision and contract administration. The assignment's cost is estimated at EUR 350,000, to be financed by the European Union Western Balkans Investment Framework - WBIF.  
  • TC3 - Financial and Operational Performance Improvement Programme, including revision of the PSC and the Infrastructure Asset Management Plan. The assignments cost is estimated at EUR 300,000, to be financed by an international donor or the EBRD Shareholder Special Fund.

Company Contact Information

Sami Miftari
sami.miftari@kru-mitrovica.com
+383 28 520304
http://www.mzhe-ks.net/npmnp/?page=1,83
Bislim Bajgora pn. 40000 Mitrovica

PSD last updated

23 Jan 2020

Understanding Transition

Further information regarding the EBRD’s approach to measuring transition impact is available here.

Business opportunities

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Environmental and Social Policy (ESP)

The ESP and the associated Performance Requirements (PRs) set out the ways in which the EBRD implements its commitment to promoting “environmentally sound and sustainable development”.  The ESP and the PRs include specific provisions for clients to comply with the applicable requirements of national laws on public information and consultation as well as to establish a grievance mechanism to receive and facilitate resolution of stakeholders’ concerns and grievances, in particular, about environmental and social performance of the client and the project. Proportionate to the nature and scale of a project’s environmental and social risks and impacts, the EBRD additionally requires its clients to disclose information, as appropriate, about the risks and impacts arising from projects or to undertake meaningful consultation with stakeholders and consider and respond to their feedback.

More information on the EBRD’s practices in this regard is set out in the ESP.

Integrity and Compliance

The EBRD's Office of the Chief Compliance Officer (OCCO) promotes good governance and ensures that the highest standards of integrity are applied to all activities of the Bank in accordance with international best practice. Integrity due diligence is conducted on all Bank clients to ensure that projects do not present unacceptable integrity or reputational risks to the Bank. The Bank believes that identifying and resolving issues at the project assessment approval stages is the most effective means of ensuring the integrity of Bank transactions. OCCO plays a key role in these protective efforts, and also helps to monitor integrity risks in projects post-investment.

OCCO is also responsible for investigating allegations of fraud, corruption and misconduct in EBRD-financed projects. Anyone, both within or outside the Bank, who suspects fraud or corruption should submit a written report to the Chief Compliance Officer by email to compliance@ebrd.com. All matters reported will be handled by OCCO for follow-up. All reports, including anonymous ones, will be reviewed. Reports can be made in any language of the Bank or of the Bank's countries of operation. The information provided must be made in good faith.

Access to Information Policy (AIP)

The AIP 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 following its entry into force on 1 January 2020. Please visit the Access to Information Policy page to find out what information is available from the EBRD website.

Specific requests for information can be made using the EBRD Enquiries form.

Independent Project Accountability Mechanism (IPAM)

If efforts to address environmental, social or public disclosure concerns with the Client or the Bank are unsuccessful (e.g. through the Client’s Project-level grievance mechanism or through direct engagement with Bank management), individuals and organisations may seek to address their concerns through the EBRD’s Independent Project Accountability Mechanism (IPAM).

IPAM independently reviews Project issues that are believed to have caused (or to be likely to cause) harm. The purpose of the Mechanism is: to support dialogue between Project stakeholders to resolve environmental, social and public disclosure issues; to determine whether the Bank has complied with its Environmental and Social Policy or Project-specific provisions of its Access to Information Policy; and where applicable, to address any existing non-compliance with these policies, while preventing future non-compliance by the Bank.

Please visit the Independent Project Accountability Mechanism webpage to find out more about IPAM and its mandate; how to submit a Request for review; or contact IPAM  via email ipam@ebrd.com to get guidance and more information on IPAM and how to submit a request.

 

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