Orsha Wastewater Subproject

Location:

Belarus

Project number:

47426

Business sector:

Municipal and environmental infrastructure

Notice type:

Public

Environmental category:

B

Target board date:

15 Mar 2016

Status:

Signed

PSD disclosed:

30 Jun 2015

Translated version of this PSD: Russian

Project description and objectives

Financing to the city of Orsha for the  reconstruction and modernisation of  wastewater treatment facilities.

A sovereign loan of € 21 million, of which up to € 6 million will be allocated for the benefit to Unitary Enterprise Orshavodokanal, a municipally owned company that provides water and wastewater services in the city of Orsha.

The Loan will finance a Priority Investment Programme (the “PIP”) aimed at reconstruction and modernisation of the wastewater treatment facilities to ensure compliance with the EU standards. A small portion of the Loan will be used to finance an upgrade of the water supply infrastructure.

Transition impact

  • Framework for Markets: In line with the objectives of the earlier engagement in the water sector, the current framework including this project will aim to introduce tariff reforms for the participating utilities.
     
  • Demonstration of Successful Restructuring: due diligence will identify restructuring measures that will be implemented as part of the Corporate Development Programme.
     
  • Setting Standards of Corporate Governance and Business Conduct: the Company will improve its disclosure standards, including publication on the website of annual IFRS financials, investment summary and performance against KPIs set in the PSC.

The client

Sovereign loan to the Republic of Belarus with on-lending to Unitary Enterprise Orshavodokanal is a municipally owned company that provides water and wastewater services in the city of Orsha located in the Vitebsk Oblast of Belarus with a population of 117,000 people. The company services cover a population of 117,000 from the city area and 16,000 from the adjacent areas.

EBRD finance

A sovereign loan of € 21 million, of which up to € 6 million will be allocated for the benefit to Unitary Enterprise Orshavodokanal. The project will be co-financed with a grant from an international donor in the amount of up to € 3 million.

Total project cost

€ 10.22 million.

Environmental and social categorisation, impact, and mitigation

The Project has been categorised B under the 2014 Environmental and Social Policy. An Environmental and Social Due Diligence (ESDD) included an assessment of the proposed PIP and an audit/review of the existing facilities, operations and management practices of the Company. The study concluded that the implementation of the proposed PIP will bring drinking water quality and wastewater discharges in Orsha into compliance with national and EU requirements, and that this will result in substantial environmental and public health benefits and also overall will reduce pollution of the Black Sea basin. Any adverse impacts will be limited, localised and short-term and will be mitigated by adhering to good construction and management practice.

Environmental and Social Due Diligence (ESDD) carried out by independent consultants as part of the Feasibility Study confirmed that the project will not involve increases of the existing WWTP’s design capacity beyond 150,000 PE, and reconstruction will take place at the existing premises, hence no new land acquisition or resettlement would be required.

The Company already has OHSAS 18001 compliant occupational health and safety management system in place, however it needs to develop an Environmental Management System, further improve its internal environmental and social (E&S) capacity and stakeholder engagement practices. The proposed reconstruction and modernisation plans will need to obtain the necessary environmental approvals before the start of construction. ESDD has also identified that the Company will need to develop and implement a grievance mechanism in line with PR2, improve contractor EHS management practices through specific requirements in tender documents and a contractor E&S monitoring programme, develop a construction EHS management plan with specific emphasis on avoiding any potential displacement and ensuring public health and safety, develop a sludge management plan and a chance finds procedure, and finalise and implement a stakeholder engagement plan (SEP) including external grievance mechanism. An Environmental and Social Action Plan (ESAP) has been developed to structure the project to meet EBRD requirements and it included the identified corrective and mitigation measures identified during ESDD.

The Bank will monitor the project’s environmental and social performance and compliance with EBRD PRs by reviewing annual reports prepared by the Company on environmental and social matters, and implementation of the ESAP. The TC funded PIU Support and CDP consultants will also monitor day-to-day E&S performance and issues, provide the necessary capacity building support and provide assistance in the implementation of the ESAP.

Technical cooperation

Pre-Signing

  • TC 1: Project due diligence to include: (i) a technical review of the proposed operations to improve the water and wastewater services in the City, demand, revenue and operational cost projections; (ii) preparation of technical and functional specifications of the PIP components; (iii) financial and economic analysis of the proposed investments, including cost estimates and the preparation of the financial model; and (iv) environmental and social assessment in line with EBRD’s 2014 E&S Policy and Performance Requirements; and a legal due diligence on the envisaged project structure. € 250,000, funded by the Government of Sweden.
     
  • TC 2: Audit and restatement of the Company’s accounts in accordance with IFRS. € 21,667, financed by the Bank’s own resources.

Post-Signing

  • TC 3: Project Implementation Support. The TC will support the PIU with procurement, preparation and evaluation of tenders, contract award and administration, financial control, project management and reporting including assistance to the Company in implementation of ESAP and preparation of annual E&S reporting. The estimated cost of the assignment is € 600,000, to be financed by the Government of Sweden
     
  • TC 4: Corporate Development and Programme. The TC will (i) support institutional development in the form of operational improvements and financial improvements and (ii) implement a Social Support Programme. The estimated cost of the assignment is € 300,000, 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.