R2CF Bihor Sub-Project

Location:

Romania

Project number:

43548

Business sector:

Municipal and environmental infrastructure

Notice type:

Public

Environmental category:

B

Approval date:

12 Oct 2012

Status:

Repaying

PSD disclosed:

30 Jul 2012

Translated version of this PSD: Romanian

Project Description

The EBRD is considering providing a loan of up to EUR 8.6 million to S.C. Compania De Apă Oradea S.A. (the Company) for water and wastewater infrastructure improvements in Bihor county, in northwestern Romania.

The EBRD loan will co-finance a EUR 83.3 million regional investment programme supported by grant funding from the European Union, the Government of Romania and the local governments under Romania’s Cohesion Fund Programme.

The project will enable the Company to extend and rehabilitate its network in the County of Bihor as well as to improve water and wastewater services in seven local communities in the County, namely: Oradea, Beius, Tinca, Santandrei, Palota, Girisu de Cris, Tarian, Biharia, Nojorid, Osorhei, Alparea, and Fughiu. Investments are expected to significantly reduce water losses, optimise operating costs and expand water supply and wastewater collection and treatment services in Bihor County in line with relevant EU directives.

The EBRD financing is a sub-project of the EUR 130 million extension of the Regional EU Cohesion Fund Water Co-Financing framework for regionalised water companies in Romania (the “Framework”). The project summary document for the Framework was published on 23 September 2010.

Transition Impact

R2CF Bihor together with other sub-projects under the Framework will support environmental improvements, efficiency gains from continued regionalisation of water and wastewater services and transfer of commercial and managerial skills in water and wastewater operations to less-developed localities. Compliance with the European Union relevant water legislation is also envisaged. Benchmarking will be a key component of the Framework.

Under the Framework extension, additional transition impact for this sub-project will be also achieved through procurement capacity building.

The Client

S.C. Compania De Apă Oradea S.A, a regional operating company providing water and wastewater services in the County of Bihor, located in north-west Romania.

EBRD Finance

EUR 8.6 million to S.C. Compania De Apă Oradea S.A.

Project Cost

EUR 83.3 million.

Environmental Impact

The project has been categorised B in accordance with EBRD’s 2008 Environmental and Social Policy. The potential E&S impacts associated with the project components are likely to be site-specific and can be readily identified and addressed through adequate mitigation measures.

The project addresses the first phase of investments (priorities) outlined in the Bihor County Plan for the development of the water sector, and it is expected to bring improved water and sewerage services to the local population, increase the connection rates to the water supply and the sewerage collection networks, and to improve the efficiency and the quality of wastewater treatment. The project is designed to meet compliance with the EU Drinking Water Directive and Urban Wastewater Directive in the project area.

The due diligence is currently on-going. It includes an E&S review of the Company's existing facilities, operations and management systems to assess the past and current performance, and a gap E&S analysis of the project appraisal documents for the project prepared for the EU Cohesion Fund application to assess compliance with EBRD's Performance Requirements (PRs). An Environmental and Social Action Plan (ESAP) will be prepared and agreed with the Company to address any environmental and social issues identified during the due diligence to achieve and maintain compliance with the Bank's PRs within a reasonable time-frame. The Company will also develop a Stakeholder Engagement Plan, including a grievance mechanism.

This PSD will be updated after the due diligence.

Technical Cooperation

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. (EUR 125,000 financed by the Government of Spain under the original Framework) and extended for an additional EUR 100,000 to support sub-projects under the Framework extension.
  • Financial due diligence of sub-projects under the Framework extension (EUR 75,000, to be financed from the Bank’s own resources), which will be extended to support sub-projects under the Framework extension).
  • Benchmarking and FOPIP programme (EUR 750,000 financed by the Shareholder Special Fund under the original Framework), which will be extended to cover water utilities financed under the Extension.
  • Procurement Benchmarking TC of approximately EUR 180,000 to assist water companies in receiving procurement certification to raise capacity in this sector.
 

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

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