Plovdiv Water Investment Project

Location:

Bulgaria

Project number:

37752

Business sector:

Municipal and environmental infrastructure

Notice type:

Public

Environmental category:

B

Target board date:

06 Nov 2007

Status:

Repaying

PSD disclosed:

13 Aug 2007

Project Description

The proposed project provides finance to rehabilitate and up-grade the water supply infrastructure of Plovdiv Regional Water Company, a water supply and wastewater services provider for a number of municipalities including Plovdiv, the second biggest city in Bulgaria. The investment will target reduction of water losses and other operating costs, and improving the quality and reliability of provided service. The proposed project will also improve the Company’s financial and operational performance by providing technical cooperation funds for the development of financial and operational performance improvement plan for the Company.

Transition Impact

The sources of transition Impact originate from the following:

  1. demonstration of successful utility company restructuring;
  2. testing of the regulatory environment and
  3. energy efficiency.

1. Demonstration of successful utility company restructuring
The Bank intends to mobilise technical co-operation to promote commercialisation of the Company and improve its financial and operational performance. Milestones and targets agreed with the Company will be included as covenants in the Loan Agreement. The capacity building to take place during the project implementation should allow Plovdiv RWC to access EU structural funds to further support its major rehabilitation programme. EU grants will be particularly needed to meet the high costs for rehabilitation of the wastewater treatment plant (WWTP) of Plovdiv.

2. Testing of the regulatory environment
The proposed project will play an important role in demonstrating the effectiveness of the newly established regulatory framework in the water sector. The Company will be able to achieve a cost recovery tariff, which will allow it to finance its investments on a commercial basis.

3. Energy efficiency
The energy savings to be achieved through the project would have a demonstration effect on the energy efficiency potential of water network rehabilitation. The Bank will estimate the levels of CO2 savings and determine whether emission sales could be included as part of the project as well as evaluating the potential for carbon credit sales as part of the future WWTP project.

The Client

Plovdiv Regional Water Company is a regional water supply and sewage company, 100 per cent owned by the State through the Ministry of Regional Development and Public Works, providing services to 18 municipalities including Plovdiv itself.

EBRD Finance

  • EBRD loan to the Company: EUR 9.1 million
  • Other sources: EUR 1.0 million
  • EBRD TC Donor grant: EUR 0.3 million

Project Cost

The total project cost is expected to be between EUR 10 and 11 million.

Environmental Impact

Environmental classification and investigations

The EBRD has classified the project B/1. The rehabilitation of water supply and wastewater treatment infrastructure are expected to result in significant environmental benefits and have limited adverse environmental impacts, which can be readily identified, assessed and mitigated in an Environmental Analysis. An environmental audit of the existing facilities and operations as well as an environmental analysis of the impacts of the project have been undertaken by independent consultants as a part of the Feasibility Study of the project funded by the EBRD's TC funds.

Environmental issues

The Investment program includes rehabilitation of part of the water supply network of Plovdiv City and the rehabilitation and modernisation of facilities at the wastewater treatment plant ("WWTP"). The aim of the water supply projects is to ensure the reliability of the water supply system and to improvement the water supply service as well as the quality of the drinking water. The implementation of the projects will result in reduced leakage, reduced maintenance costs, better management and improved control of the water system and equipment. The rehabilitation and modernisation of the WWTP will connect the northern part of Plovdiv City to the WWTP and make the WWTP facilities able to treat the increased volume of wastewater in accordance with the national (equal to EU) wastewater discharge standards. The wastewater from the northern part of the City is currently directly discharged into Maritsa River without any treatment. The project will, therefore, help improve of the water quality in the river.

The implementation of the investments involves limited, localised and short-term adverse environmental impacts during the execution of construction works. These impacts can be easily mitigated or prevented by good construction practices.

Summary of mitigation measures

An Environmental Action Plan (“EAP”) has been developed to help the Company (i) implement the priority projects in an environmentally sound and sustainable manner as well as (ii) achieve higher standards of operational efficiency and environmental performance. The company will need to undertake a number of additional investments and measures so as to achieve compliance with the applicable environmental and health and safety requirements. The most important area of improvement is the management (handling and disposal or utilisation) of sludge from the WWTP. Other actions to be undertaken by the Company are related to development of a Waste Management Programme; obtaining all necessary permits and consents for water abstraction and wastewater discharges; removal, storage and disposal of asbestos-cement pipes; and measures for mitigating negative impacts, including traffic disruption, during construction activities. The EAP also includes measures for the Company to develop its environmental, health and safety management systems.
Disclosure of Information and Consultation

Environmental information on each of the projects will be disclosed to public prior to implementation in accordance with the planning and construction procedures of Bulgarian law. In the context of EBRD’s participation in the project, this environmental summary will be disclosed locally at the Company’s offices and in the local media.

Monitoring and reporting

The Company will monitor the environmental footprint of the implementation of the projects as well as its operations in accordance with Bulgarian regulatory requirements and a specific monitoring programme, which has been developed as part of the environmental investigations. The Company will report to the EBRD annually on the measured environmental impacts and on the implementation of the EAP, including the mitigation measures. The Bank will evaluate the project's compliance with the applicable environmental and social standards during the lifetime of the project by reviewing these reports. The EBRD may also conduct monitoring visits to the project when and if deemed appropriate.

Technical Cooperation

Associated TC programme is Development of Financial and Operational Performance Improvement Plan: EUR 300,000 to be identified.

Company Contact

Krasimir Tsvetkov, general manager.

Tel: +359 32 605 625
Email: vik@vik.bg

 

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)

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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.