Osh Solid Waste Project

Location:

Kyrgyz Republic

Project number:

42471

Business sector:

Municipal and environmental infrastructure

Notice type:

Public

Environmental category:

B

Approval date:

22 Apr 2015

Status:

Signed

PSD disclosed:

24 Mar 2014

Translated version of this PSD: Russian

Project Description

The EBRD is considering providing a loan of up to EUR 2 million to finance critical solid waste investments for the City of Osh (the “City”) and four neighbouring municipalities; Kyzyl-Kyshtak, Nariman, Shark, and Toloykon (the “Municipalities”).

It is expected that the European Investment Bank would provide an up to EUR 3 million co-financing loan and that the EU’s Investment Facility for Central Asia (IFCA) would provide EUR 5 million in the form of a grant.

The proceeds of the loans and the grant will finance a new sanitary landfill construction and upgrade of collection and transportation system. The project will result in an improved level of solid waste services and environmental improvements in the City and the Municipalities.

The project will measure success by monitoring the following indicators before and after project implementation:

(i) Population with improved solid waste management services, measured by the number of households with improved solid waste management services multiplied by average household size; and

(ii) Reduction in tonnes of CO2 equivalent due to diversion of solid waste from landfill disposal, measured by the tonnes of waste diverted away from landfill multiplied by average greenhouse gas emission potential based on waste content.

Transition Impact

The transition impact of this project is expected to include:

  • Framework for markets: A new cost recovery tariff methodology within affordability constraints will be developed under the project.
  • Setting standards for corporate governance and business conduct: The project is expected to bring improved standards of transparency and governance in a number of new ways such as: requiring financial reports to be produced to International Financial Reporting Standards; requiring international tendering for the contracts; requiring annual financial and environmental, social health and safety reports to be prepared; helping the Company to create a new customer relations strategy and complaints handling procedures; and, exposing the current management to an independent, expert review of current operating and financial management practices along with the development and implementation of recommendations to bring greater efficiency. Financial and operational performance improvement of the Company will be supported by the CDP mainly by developing and implementing PSC between the City and the Company.
  • The expected transition impact rating is ‘good’.

The Client

The loan is made to the Kyrgyz Republic, to be on-lent to the City of Osh for the benefit of its solid waste management company. The ultimate beneficiary is Osh Tazalyk, a municipal enterprise providing solid waste management services in the City and the Municipalities.

EBRD Finance

EUR 2.0 million to the Kyrgyz Republic.

Project Cost

EUR 12.2 million.

Environmental Impact

The project has been categorised B. The potential adverse future environmental and social impacts associated with rehabilitation of waste collection, transportation, and disposal services in Osh and construction of a new EU compliant landfill are likely to be site-specific and can be readily identified and addressed through adequate mitigation measures.

The project will bring substantial environmental, health and safety benefits to the city of Osh and the and four neighbouring municipalities through the rehabilitation of waste collection, transportation, and disposal services; increased operational efficiency, and environmental and hygiene standards. However, the limited financial resources available will not be sufficient for meeting the EU environmental requirements relating to recovery, recycling and re-use of waste and disposing of waste as the last resort. Hence derogation from the ESP will need to be sought.
The Environmental and Social Due Diligence (ESDD) included an independent environmental and social audit of the Company's current operations and facilities, and an analysis of potential environmental and social issues associated with the proposed PIP. The Company's environmental and social management capabilities were also reviewed and assessed, as well as tariff affordability issues, resettlement, livelihood and gender-related impacts and opportunities.

The results of the ESDD confirm that the existing waste management practices and facilities are poor and not in compliance with the current EU legislation and the EBRD Performance Requirements. The dumpsite is being operated with insufficient technical equipment and the operation does not comply with basic environmental and health standards. Also, due to the lack of personal protective equipment, health and safety standards for the workers performing waste collection and landfill operations are low. However, the investigations indicate that if adequate technical and operational measures are implemented, the area in southern part of Shark Municipality selected after assessment of different alternative locations can be used for a new sanitary landfill without significant risks to human health and environment pollution. Under the project agreements, it will be required that when the sanitary landfill is constructed, the existing dumpsite will be closed and covered with soil.
There are approximately 30 people whose livelihoods depend to a significant extent on collecting secondary materials on the existing dumpsite. A Compensation and Livelihood Restoration Framework was prepared at the stage of the Feasibility Study and this will be developed into a Compensation and Livelihood Restoration Plan at the stage of working design for the Project components.

An Environmental and Social Action Plan (ESAP) has been developed for mitigation of identified E&S issues and impacts during preparation, construction and operation of the project including the following main areas: development and implementation of EHS management systems; safe closure of the existing dumpsite; establishment of good EHS management practises for waste collection and disposal activities (optimised landfill gas and leachate collection, noise minimisation, avoidance of littering, birds, vermin, use of PPEs, site security and access control, etc.); development of plans for waste recovery, recycling and re-use in accordance with the EU environmental standards; contractor management; monitoring requirements; customer relations; HR issues and promotion of access to Equal opportunities in the work for women; implementation of the LHR; chance find procedures; and stakeholder engagement.

The Company will provide the Bank with annual environmental and social reports, including updates on the implementation of the ESAP and resettlement action plan. The Bank will conduct monitoring visits, as required, and commission a completion audit.

Technical Cooperation

The following technical co-operation (“TC”) assignments are envisaged as part of this project. In all cases, the services have been/will be provided in conjunction with the Jalalabad Solid Waste project and the budgets shown are for the total support to both investments.

Pre Loan Signing:

  • Feasibility study consisting of full financial, technical and environmental due diligence of the proposed project and the solid waste sector in Osh. EUR 649,000 financed by EU Investment Facility for Central Asia.
  • Restatement and Audit Services for the Companies. EUR 23,322, financed by the Bank’s own resources.

Post Loan Signing:

  • Support to the Project Implementation Unit, Engineering Design Services, Procurement and Contract Supervision. EUR 1.2 million, to be financed by the EBRD Shareholder Special Fund.
  • Corporate Development, City Support (CDP) and Stakeholder Participation Programmes (SPP) comprising support to the Company to optimise operations including improved financial and environmental performance as well as support to the City to raise institutional capacity to effectively manage the project including enhanced environmental monitoring capacity. The SPP will enhance public awareness of solid waste management and project related issues. EUR 700,000, to be financed by a multi-lateral donor.
 

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.