Namangan Water Project

Location:

Uzbekistan

Project number:

49359

Business sector:

Municipal and environmental infrastructure

Notice type:

State

Environmental category:

B

Approval date:

19 Sep 2018

Status:

Disbursing

PSD disclosed:

19 Oct 2021

Project Description

The provision of a sovereign loan of up to US$ 60 million (€50 million) to the Republic of Uzbekistan to be on-lent and/or granted to the water utility Limited Liability Company Namangan Suv Ta'minoti, formerly known as the State Unitary Enterprise Namangan Suvokova to finance its Priority Investment Programme (PIP). The PIP includes such investments in water and wastewater infrastructure of Namangan oblast as the rehabilitation of water and wastewater networks and pumping stations, the construction of water and wastewater treatment plants, laboratory equipment and the extension of metering coverage in the city of Namangan. These components are aimed at improving water quality, access to safe drinking water and wastewater treatment services.

Project Objectives

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.

Transition Impact

ETI score: 61

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.

Client Information

UZBEKISTAN SOVEREIGN

EBRD Finance Summary

USD 60,000,000.00

Total Project Cost

USD 72,000,000.00

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 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) 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 non-compliances 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 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 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.

Technical Cooperation and Grant Financing

Pre-signing:

  • TC 1: Technical, financial, environmental and social due diligence. The assignment's cost was €200,000, funded by Infrastructure Project Preparation Facility (IPPF).

 

Post-signing:

  • 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.

Company Contact Information

Head of PIU
po.ebrd@uzsuv.uz
+99855-503-12-55
+99855-503-12-55
http://uzsuv.uz
1 Niyozbek Yuli street, Tashkent City, 100035, Uzbekistan

PSD last updated

19 Oct 2021

Understanding Transition

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

Business opportunities

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Specific enquiries can be made using the EBRD Enquiries form.

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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