R2CF Covasna sub-project

Location:

Romania

Project number:

42570

Business sector:

Municipal and environmental infrastructure

Notice type:

Public

Environmental category:

B

Target board date:

16 Dec 2011

Status:

Repaying

PSD disclosed:

02 Dec 2011

Translated version of this PSD: Romanian

Project Description

The EBRD is considering providing a loan of to €7.6 million to S.C. Gospodarie Comunala S.A for water and wastewater infrastructure improvements. The financing is a sub-project of the €200 million Framework for Romania EU Cohesion Fund Co-Financing for regionalised water companies (the “Framework”).

The project will be cofinanced by a regional investment programme of up to of €78.9 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. The investments are expected to significantly reduce water losses, optimise operating costs and expand the water supply and wastewater collection and treatment services in Covasna County, in line with relevant EU directives.

Transition Impact

The sub-project will support environmental improvements as well as the continued regionalisation of water and wastewater services in Covasna County, which will result in efficiency gains as well as the transfer of commercial and managerial skills to less-developed localities in the county. The Company will participate in a benchmarking programme alongside other borrowers under the Framework, which was approved by the Bank to co-finance projects in Romania’s water and wastewater sector alongside EU Cohesion Funds.

The project will also inlcude tariff adjustments to achieve financial and operational sustainability.

In addition, the transition impact potential for this Project will be further enhanced based on the fact that the Company is expanding to smaller and less developed communities, resulting in a greater scope for institutional capacity building.

The Client

S.C. Gospodarie Comunala S.A. (Apa Canal Covasna).

EBRD Finance

Senior loan of up to €7.6 million.

Project Cost

Up to €86.5 million.

Environmental Impact

The Project has been categorised B in accordance with the EBRD Environmental and Social Policy. The potential E&S impacts associated with the project components can be readily identified and addressed through adequate mitigation measures.

The project is expected to result in significant community health benefits. One of the eligibility criteria for sub-projects under this Framework is approval of the Companies' investment programmes by the EU Cohesion Fund programme.

The due diligence for each sub-project will include:

  • An E&S review of each participating company’s existing facilities and operations and their management systems to assess the past and current performance against relevant Performance Requirements (PRs); and
  • A gap analysis of the project appraisal documents for the project prepared for the EU Cohesion Fund application to assess compliance with the EBRD PRs.

Based on the recommendations of the due diligence an Environmental and Social Action Plan (ESAP) will be prepared for each sub-project. The ESAPs will be structured to bring the existing facilities and operations, including water, wastewater and sludge management/disposal into full compliance with national and EU environmental standards. The participating companies will also develop a Stakeholder Engagement Plan in accordance with PR10.

The ESAPs will be part of the legal agreements between the participating companies and the EBRD. This PSD will be revised once the due diligence and ESAPs are finalised.

Technical Cooperation

The sub-project will benefit from overall TC under the Framework, including an analysis of the environmental and social impacts, issues and risks and a gap analysis (€125,100 - financed by Spain), institutional and financial due diligence (€74,800 - financed from the EBRD’s own resources) as well as a benchmarking and FOPIP programme (€750,000 - financed by the EBRD’s Shareholder Special Fund).

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

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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.