The Bank will provide a sovereign loan of up to US$ 60 million (€50 million) to the Republic of Uzbekistan ("RoU") to be on-lent and/or granted to the State Unitary Enterprise Namangan Suvokova ("Company") to finance the Company's Priority Investment Programme ("PIP"). The PIP includes such investments in water and wastewater infrastructure of Namangan oblast as rehabilitation of water and wastewater networks and pumping stations, construction of water and wastewater treatment plants, laboratory equipment and extension of metering coverage in the city of Namangan ("Project"). These components are aimed at improving water quality, access to safe drinking water and wastewater treatment services.
The Project is expected to increase the number of people connected to safe water by 280,000, increase the volume of treated wastewater, reduce water losses and secure energy savings.
The sources of transition impact are:
1) Green. The Project is expected to increase the number of people connected to water and wastewater network, increase the volume of treated wastewater, reduce water losses and enhance the energy efficiency through rehabilitation of pumping stations and networks and improved maintenance capacity of the Company. The Project qualifies as a positive environmental activity.
2) Resilient. The Project will focus on financial and operational improvements to achieve cost recovery and sustainability of the Company.
EBRD Finance Summary
Total Project Cost
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 proposed Priority Investment Programme (PIP) for the Project was carried out as part of the Feasibility Study by independent consultants engaged under the IPPF. It included a review of current practices, an assessment of the Project's potential E&S impacts and a review of the Company's E&S provisions and management capacities. All PIP components will be subject to local permitting procedures and EIA law (OVOS - Assessment of Environmental Impacts/EIA ) in the future. An Environmental and Social Action Plan (ESAP) has been developed for the Project and will be agreed with the Company under a separate Project Agreement prior to Board approval.
A Stakeholder Engagement Plan (SEP) and a non-technical summaries (NTS) have also been developed and will be disclosed.
The Company has assigned environmental, H&S and HR personnel with a good understanding of environmental and social national legal responsibilities related to its operations. The Company is operating in compliance with national legislation and related permits (where issued) with some noncompliances to be addressed with corrective measures in the ESAP.
Centralised water supply services are provided to approx. 65.2 per cent of the population in the Namangan region. This indicator varies from 85 per cent in Namangan and some towns, to 20 per cent in rural settlements. About 1 million people have connections to the water supply network in their homes, and about 100,000 people use street standpipes. Water is abstracted from surface sources (the Northern Namangan and Fergana Canals) and one ground water intake to supply Namangan and surrounding areas. According to the Company's data, water losses are about 45 per cent. In addition the Company operates about 490 local ground water intakes, which provide water supply for individual villages. Problems with the current infrastructure include insufficient capacity and technical wear of water intakes and water treatment facilities. Drinking water is of poor quality (exceeding limits for suspended solids and microbiological parameters) due to poor network condition, low water disinfection efficiency, and inadequate water treatment quality at the Kurashkhana WTP. The system lacks efficient safety equipment and measures when using gaseous chlorine, and low quality of dosing equipment. About 30 per cent of the Namangan's population is connected to the centralised wastewater collection network. There are no centralised wastewater systems in rural settlements.
There are only 5 wastewater pumping stations (WWPSs) in the Namangan region, of which 3 are operated by the Company and two belong to other organizations. All pumping stations are manually operated. Wastewater does not undergo a treatment process. Wastewater flows via civil structures of the wastewater treatment plants (WWTPs) while being subject to secondary bacterial contamination due to anaerobic fermentation of accumulated sediment. The low reliability of power supply to the WWPSs and WWTPs has a negative impact on automated systems and leads to electrical equipment breakdowns and disrupts the biological treatment processes on WWTPs. The Company operates in line with requirements of the local environmental authorities which at times differ from the national legislation.
The PIP was designed to address the objectives of achieving compliance with national drinking water and wastewater quality standards, the EU Drinking Water Directive and Urban Waste Water Treatment Directive and the EBRD PRs. To ensure the required degree of water treatment the Project will provide for multi-stage treatment of incoming wastewater at the Pap WWTP (mechanical and biological). Tertiary treatment for nutrient removal is considered beyond requirements in line with Urban Waste Water Treatment Directive, based on the capacities of the Pap WWTP and absence of sensitive receptors. The Project also assumes dehydration, post-treatment and maturing of sludge. ESDD has concluded that the long-term effects of the implementation of the overall PIP will have a mostly positive social character, and relating to the provision of better services to population, i.e. improvement of water supply and wastewater services, creation possibilities for new connections to the water supply and sewerage systems, improvement of drinking water quality to meet national and the EU standards, reduction of sanitary and epidemiological risks. In terms of environmental benefits mitigation of soil pollution risks, tangible reduction of water losses, improvements of occupational safety and working conditions for the Company personnel.
Reconstruction of the WWTP in the town of Pap will eliminate discharge of untreated wastewater from Pap district into the river Syr Darya. It should also be noted that the complete modernisation and expansion of the main WWTP in the city of Namangan is planned to be financed from the state budget. The existing WWTP in the town of Uychi will be closed and a wastewater main collector will be constructed instead (also under state budget financing) to transport sewage from Uychi district to Namangan WWTP. Upon completion of the Project, the discharge of approximately 90 per cent of untreated wastewater from various sources in Namangan Oblast will be completely halted, with a pronounced positive effect to the condition of surface water bodies, as well as groundwater and soil.
Negative impacts are mostly of a short-term nature and relate to the construction stage. Most will be localised within construction sites except for the projects related to modernizing water mains and distribution networks. These impacts include noise generated by equipment, local short-term increases in traffic intensity and corresponding air pollution, and soil and landscape disturbances during excavation works. These impacts can be mitigated by proper organization of works.
The affordability assessment carried out by the Feasibility Study consultant did not identify significant water tariff affordability concerns from the implementation of the Project.
An ESAP has been developed for the Project along with a Stakeholder Engagement Plan (SEP) and a non-technical summary (NTS). 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 (Environment, health and safety)capacity and development of EHS procedures relating to the main EHS risks; development of HR policies; development of contractors' EHS management programme; improved water supply and waste water quality monitoring; development of CESMP (Construction Environmental and Social Managements Plan) for contractors implementing the PIP; and implementation of the SEP together with a public grievance mechanism. The EBRD 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.
• TC 1: Technical, financial, environmental and social due diligence. The assignment's cost was €200,000, funded by Infrastructure Project Preparation Facility (IPPF).
• TC 2: Corporate Development Support to the Company to enhance its institutional, operational and financial capacity. The assignment's cost is estimated at €200,000, to be financed by an international donor or the EBRD Shareholder Special Fund.
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