Translated version of this PSD: Romanian
The EBRD is considering providing a €11.79 million loan to SC Apa Canal 2000 SA (the “Company”), a regional water utility operating in Arges County to co-finance its EU Cohesion Fund project. The proposed project will assist the Company in extending and rehabilitating the water and wastewater infrastructure in Pitesti, Topoloveni, and Costesti-Buzoiesti aglomeration. These investments are expected to significantly reduce water losses, optimize operating costs and expand water supply and wastewater collection and treatment services in the County in line with relevant EU directives.
The Bank’s loan will co-finance a regional investment programme totalling €98.1 million which will include significant grant funding from the European Union, the Government of Romania and the local governments under Romania’s Cohesion Fund Programme.
Upon implementation of the project, the Company is expected to comply with a connection rate of 96 per cent for water and 92 per cent for wastewater for the population in the project area from the current level of 88 per cent and 70 per cent respectively.
The €11.79 million loan is a sub-project of the €130 million extension of the Regional EU Cohesion Fund Water Co-Financing framework (the “Framework”) approved by the Bank to co-finance projects in Romania’s water and wastewater sector alongside EU Cohesion Funds. The project summary document for the Framework was published on 23 September 2010.
The Arges sub-project will support environmental improvements and continued regionalisation of water and wastewater services in Arges County, which will result in efficiency gains and the transfer of commercial and managerial skills in water and wastewater operations to less-developed regions of the county. Compliance with the European Union's relevant water legislation is also envisaged. The Company, along with other borrowers under the Framework, will participate in the Benchmarking and FOPIP technical cooperation programme. In addition, the Bank is working with the Company, to identify and analyze potential investments for improving the energy efficiency of its operations.
SC Apa Canal 2000 SA, providing water and wastewater services in the County of Arges, located in Romania. The Company is predominantly owned by the City of Pitesti, which has a 99 per cent shareholding. The remaining shares are held by 15 other local authorities, including Arges County.
A senior loan of up to €11.79 million for R2CF Arges.
Categorised B. Environmental and social due diligence (ESDD) has been carried out by independent consultants. The ESDD included a site visit, review of the Company's existing E&S management systems, available technical and environmental documentation prepared in accordance with Romanian permitting requirements and the project appraisal documents prepared for the EU Cohesion Fund application as well as assessment of the project against EU environmental requirements and the EBRD PRs. The ESDD showed that the E&S impacts of the construction, extension and rehabilitation of water supply and wastewater systems are site-specific and readily addressed through adequate mitigation measures. The competent environmental authorities undertook EIA screening procedure for individual project components in accordance with applicable Romanian EIA legislation that is harmonised with the EU EIA Directive. Following the screening and public consultations, the authorities decided that EIAs were not required for any of the sub-projects. None of the sub-projects fall under category A in accordance with the Bank's Environmental and Social Policy.
The ESDD concluded that the implementation of the sub-projects for water supply and wastewater discharge and treatment will ensure compliance with national and EU requirements within the transition period agreed for meeting requirements of Directive No. 98/83/EC on drinking water quality (by 2015) and Directive 91/271/EC on urban wastewater (from 2013 to 2018 depending on the agglomeration size). The project is not expected to require any land acquisition or cause any significant displacement or resettlement impacts. However, some temporary disturbance may occur during the construction phase. There is a provision within the ESAP to develop a process to address any such disturbance and or displacement that may occur, in accordance with the Bank’s policy. No other potential significant adverse impacts or non-compliances with the EBRD PRs have been identified. The construction works will have limited, localised and short-term adverse impacts, which can be mitigated or prevented by adhering to good construction practice.
The ESDD showed that the project will result in significant environmental benefits and improve the quality of the local environment and mitigate public health risks by extending the drinking water supply and wastewater collection networks, improving drinking water treatment and quality, improve sewage collection and wastewater treatment systems. The proposed investments will enable the Company to increase water connection rates to over 99 per cent from the current level of 93 per cent and wastewater rates to 99 per cent from 80 per cent (in the town of Merisani, the project will connect to the water network residents who previously only had access to wells). As a result of this Project, over 237 thousand people will benefit from improved water and wastewater services.
None of the project components are located within Natura 2000 sites. Natura 2000 Declarations are available for the Sub-projects. According to these declarations the sub-projects will have no impacts on Natura 2000 sites.
The ESDD established that the Company has an integrated ISO 14001 and OHSAS 18001 management system and certifications in place.
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, and to bring the Company's operations into compliance with the EBRD's PRs.
The Company will provide the Bank with annual environmental and social reports, including updates on the implementation of the ESAP. The Bank will commission a completion audit and may also conduct monitoring visits, as required.
The project will benefit from TC under the original Framework and its extension, including:
- Analysis of the environmental and social impacts, issues and risks and a gap analysis. (€125,000 under the original Framework and extended by €100,000 to support sub-projects under the Framework extension), financed by the Government of Spain.
- Financial due diligence (€75,000 under the original Framework and extended by EUR 91,000 to support sub-projects under the Framework extension), financed from the Bank’s own resources.
- Benchmarking and FOPIP programme (€750,000 under the original Framework and extended by €257,301 to support sub-projects under the Framework extension), financed by the EBRD Shareholder Special Fund.
- Sector-Wide Pilot Project to Enhance Transition through Procurement Benchmarking and Certification (€180,000 under the Framework extension), financed by the EBRD Shareholder Special Fund.
- Energy Efficiency (€24,000) initially funded as a pilot for two sub-projects under the Regional Energy Audit Programme for the Corporate Sector funded by CEI Centre for European Initiative.
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