R2CF Hunedoara sub-project

Location:

Romania

Project number:

45960

Business sector:

Municipal and environmental infrastructure

Notice type:

Public

Environmental category:

B

Approval date:

25 Apr 2014

Status:

Disbursing

Translated version of this PSD: Romanian

Project Description

The EBRD is considering providing a loan of EUR 6.6 million (or RON equivalent) to Apaprod SA Deva (the “company”), a regional water company (“ROC”) operating in Hunedoara County (ca. 465,000 inhabitants) in western Romania.

The loan will co-finance a EUR 106.7 million regional investment programme supported by significant 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 expand and modernise its water and wastewater network, resulting in improved water and wastewater services for 6 localities, representing about 40 per cent of the total population of the county.

The proposed investments will enable the company to (1) ensure 100% access to water supply and wastewater treatment in the urban area; (2) reduce water losses and increase operating efficiencies; and, (3) reach compliance with the EU Water and Wastewater Directives in its service area.

R2CF Hunedoara together with other sub-projects under the framework will support environmental improvements, will assist the company to become a viable ROC, will promote tariff unification to reduce the differential between residential users as the project will help improve access to water and wastewater services in the smaller localities and bring them to one level with the main operation in Deva, the capital city. The possibility to involve the private sector in those areas where it can improve operations and obtain cost savings and the compliance with the EU relevant water legislation are also envisaged.

Under the framework extension, the transition impact is also sought by building energy efficiency components into the existing water projects.

Transition Impact

R2CF Hunedoara together with other sub-projects under the Framework will support environmental improvements, will assist the Company to become a viable ROC, will promote tariff unification to reduce the differential between residential users as the Project will help improve access to water and wastewater services in the smaller localities and bring them to one level with the main operation in Deva, the capital city. The possibility to involve the private sector in those areas where it can improve operations and obtain cost savings and the compliance with the EU relevant water legislation are also envisaged.

Under the Framework extension, the transition impact is also sought by building energy efficiency components into the existing water projects.

The Client

Apaprod S.A. Deva is a regional operating company providing water and wastewater services in Hunedoara County, in western Romania.

EBRD Finance

Up to EUR 6.6 million (or RON equivalent) for Apaprod SA Deva.

Project Cost

EUR 106.7 million.

Environmental Impact

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, for any unforseen resettlement issues that might come up, the ESAP requires development of a Resettlement and Livelihood Restoration Framework (RLRF) in accordance with national laws and EBRD requirements.

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. 40 per cent of the population of Hunedoara County (total population 465,000 inhabitants) will benefit of improved water and sewerage services due to the project; additional 9,500 people will be connected to the water network and 16,500 people to the sewerage system. The Project will increase water connection rates to 100 per cent from the current level of 86 per cent and wastewater rates to 100 per cent from 70 per cent.

A small part of the project components will be implemented within NATURA 2000 site Strei-Hateg (ROSCI-0236) but within industrial areas (two water storage reservoirs). These sites have been designated for the conservation of some plant and animal species. The environmental authorities concluded that the potential impacts of the project components on biodiversity and on the integrity and the conservation objectives of the Natura 2000 site are not significant and that no appropriate assessment was required of the project. The screening decision and environmental notification present measures for the minimization of the impact on the sites during the construction period, respectively operation period. The Natura 2000 declaration has been issued conditional to the implementation of these specific measures. The implementation of the Project will have a positive effect on the quality of surface waters and water and wastewater infrastructure.

The ESDD established that the Company has an integrated ISO 9001 and ISO 14001 management system and certifications in place. The ESAP requires the Company to develop also a health and safety management system in accordance with OHSAS 18001.

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 ESAP commits the Company amongst others developing a health and safety management system in line with OHSAS 18001;  performing a social assessment to define the success of the project from a social perspective and to provide relevant information to define the Corporative Social Responsibility Policy of APA PROD; developing site specific E&S Management Plans for each sub-project; enhancement of EHS training programmes; establishing relevant procedures and a compensation action plan/policy so as to meet the requirements of PR5, in the event of involuntary resettlement or economic displacement impacts occurring; developing procedures for contractor monitoring, cultural heritage chance find, handling and disposal of materials containing asbestos, and safety around excavations; revising sludge management plans; improving internal grievance mechanism; and adopting and implementing Stakeholders Engagement Plan compliant with EBRD PR 10.

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.

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 under the original Framework and extended by EUR 100,000 to support sub-projects under the Framework extension), financed by the Government of Spain.
• Financial due diligence (EUR 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 (EUR 750,000 under the original Framework and extended by EUR 257,301 to support sub-projects under the Framework extension), financed by the EBRD Shareholder Special Fund.
• Preliminary assessment of PSP needs of the Company of up to EUR 15,000, proposed to be financed by an international donor or the EBRD Shareholder Special Fund.

 

Business opportunities

For business opportunities or procurement, contact the client company.

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Email: procurement@ebrd.com

General enquiries

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