Nurek Water and Wastewater Project

Location:

Tajikistan

Project number:

47398

Business sector:

Municipal and environmental infrastructure

Notice type:

Public

Environmental category:

B

Target board date:

07 Sep 2016

Status:

Signed

PSD disclosed:

06 Oct 2015

Translated version of this PSD: Russian

Project Description

Supporting the project to modernise and upgrade the water and wastewater services in the city of Nurek in Tajikistan. The EBRD would provide a loan of up to USD 2.5 million to the Nurek Water Company, the municipal company owned by the municipality of Nurek. The Republic of Tajikistan would provide a sovereign guarantee. Nurek City, as owner of the Nurek Water Company, would sign a Project Support Agreement with the Bank. The EBRD will also seek an investment grant from an international donor of USD 2.5 million for this urgently needed water and wastewater infrastructure rehabilitation project.

Project Objectives

The overall objectives of this project are to:

(a) rehabilitate the water supply and selected wastewater improvements; and

(b) improve financial and operational management of the Nurek Water Company.

Transition Impact

Transition Impact of the project would be:

  • Frameworks for markets though development of tariff methodology. Improved standards of transparency and governance: introduction of a Public Service Contract; financial reporting as per IFRS; · inclusion impact through expanding the water services coverage network, improving health and living standards by introducing controlled water and wastewater operations.

Client Information

SUE WATER AND WASTEWATER COMPANY OF NUREK

Nurek Water Company

EBRD Finance Summary

USD 2,500,000.00

Loan with a sovereign guarantee of up to USD 2.5 million to the Nurek Water Company.

Total Project Cost

USD 6,500,000.00

The total project cost is USD 6.5 million including technical cooperation. Apart from its USD 2.5 million loan, the EBRD will seek an additional USD 2.5 million investment grant from an international donor for the project.

Environmental and Social Summary

The project has been categorised B (2014 ESP). The environmental and social due diligence (ESDD) included an E&S audit and analysis including a gender assessment, as well as developed an Environmental and Social Action Plan (ESAP) and Stakeholder Engagement Plan (SEP) to address the findings of the ESDD. The ESDD showed that the project will increase the population benefiting from improved access to drinking water from 57,551 in 2016 to 61,434 by 2019, and increase the population benefiting from access to wastewater collection system from 20,142 in 2016 to 24,573 by 2019. The project will also help reduce public health risks by improving the drinking water quality through on-site disinfection, reducing infiltration into water supply system, increasing the availability and reliability of water services, and better control of water quality through investments in laboratory equipment. The Project will also help improve reliability and energy efficiency of the wastewater collection through the reconstruction of a pumping station.

The ESDD concluded that the PIP represents a limited investment in improving the wastewater collection and treatment system and the project is not able to bring the Company’s operations into compliance with EU environmental standards in the short term. Further investments to upgrade and modernise the WWTP is foreseen in a later phase when the wastewater collection network is replaced and extended. To achieve full EU compliance in water and wastewater systems, it has been estimated that additional long-term investments of approximately USD 46 million would be necessary (for works including water network rehabilitation and extension, water abstraction, storage, meters, EU compliant wastewater treatment plant, network extension, increase of connection rates, etc.).  At this time the financing for the long-term investment programme from the Company’s own revenues cannot be secured, and no potential sources of external funding has been identified. Therefore, on account of constraints arising from affordability and limited financial resources, derogation from the EBRD's Environmental and Social Policy is sought in relation to EU drinking water quality and wastewater treatment and discharge standards.

The human health implications of the shortfalls from EU standards are assessed to be minor as compared with the benefits of the PIP implementation resulting in more reliable water supply to the local population. To minimise the associated health risks to the local communities, awareness raising programmes will be developed as part of the Stakeholder Engagement Plan (SEP) and mitigation plans to prevent risks of water borne diseases.

The ESDD identified that the capacity of the Water Company to manage E&S issues is low and their E&S management systems, occupational health and safety and stakeholder engagement practices require further strengthening and improvement to meet EBRD's Performance Requirements (PRs). An Environmental and Social Action Plan (ESAP) has been developed to address these findings. The ESAP commits the Company to a number of improvements, including to developing an environmental, health and safety (EHS) management system, providing regular EHS training to its staff, acquiring necessary permits, developing its HR policies and procedures and improving its HR practices, providing basic laboratory facilities for improved water monitoring, establishing of sanitary protection zones at the boreholes and removing pollution sources, monitoring of affordability for low-income groups and developing mitigation measures if affordability challenges are identified, managing and monitoring of contractors, handling and disposal of asbestos, and introducing archaeological chance find procedures.

The Company will provide the Bank with annual environmental and social reports, including updates on the implementation of the ESAP. The Bank may also conduct monitoring visits, as required. The Corporate Development TC will support the Company during the implementation of the ESAP and the SEP and development of their E&S management systems and the Bank will closely monitor the implementation.

Non-technical summary

Technical Cooperation

The following technical co-operation (TC) assignments are included in the project:

  • Feasibility Study: a financial, technical and environmental feasibility study for the project, including an economic rate of return analysis, IFRS restatement of the accounts of the participating water company, operational review and recommendations for improvements, a brief municipal credit analysis of the participating city, and an Environmental and Social Action Plan, including a gender assessment, will be financed by the government of Austria which is providing EUR 280,000.
     
  • Project Implementation Support: international consultants to assist the project implementation unit with engineering design, procurement, preparation and evaluation of tenders, contract award and  administration, financial control, project management and reporting. The cost of this, USD 700,000, is proposed to be financed by an international donor, the EBRD's Shareholder Special Fund (SSF) or the EBRD Early Transition Countries (ETC) Fund.
     
  • Corporate Development and Stakeholder Participation Programme: (i) support institutional development in the form of operational improvements and financial improvements to secure sustainability of the water company; and (ii) implement a Stakeholder Participation Programme. The cost, USD 500,000, is proposed to be financed by an international donor, the EBRD's SSF or the ETC Fund.

Company Contact Information

Dilshod Asoev

dilshod-asoev@mail.ru

+9928313822121
+9928313122313

Republic of Tajikistan, Khatlon Region, Norak City, Rudaki 8 street, 735300

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.