R2CF Prahova sub-project

Location:

Romania

Project number:

43338

Business sector:

Municipal and environmental infrastructure

Notice type:

Public

Environmental category:

B

Target board date:

30 Nov 2012

Status:

Repaying

PSD disclosed:

07 Nov 2012

Translated version of this PSD: Romanian

Project Description

The EBRD is considering providing up to €9.2 million alongside up to €116.5 million from EU Cohesion Funds, as well as the funding from the local and state budget to finance the €146.2 million regional water investment programme of SC Hidroprahova SA, a regional operating company providing water and wastewater services in Prahova County.

The proposed project will assist the Company in extending and rehabilitating the water and wastewater infrastructure in 8 agglomerations of the County: Breaza, Baicoi Campina, Mizil, Plopeni, Sinaia, Urlati and Valenii de Munte. The 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.

Upon implementation of the project, the Company is expected to comply with the following physical indicators:

  • A connection rate of 96% for water and 91% for wastewater for the population in the project area
  • Minimum 95% water and wastewater quality compliance in the project area

The €9.2 million loan project 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.

Transition Impact

The sub-project will support environmental improvements and continued regionalisation of water and wastewater services in Prahova 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 Prahova county.

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

SC Hidroprahova SA is a regional operating company providing water and wastewater services in Prahova County, located in central Romania.

EBRD Finance

A loan up to €9.2 million for R2CF Prahova.

Project Cost

Up to €146.2 million for R2CF Prahova.

Environmental Impact

Categorised B. The potential environmental and social (E&S) impacts of construction/rehabilitation of wastewater treatment plants and extension and rehabilitation of water distribution and sewerage networks are site-specific and readily addressed through adequate mitigation measures. The competent environmental authorities undertook the Environmental Impact Assessment (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 sub-project in Sinaia agglomeration was required to undergo a full EIA process according to applicable Romanian legislation. For all of the other sub-projects only Technical Memorandum was required.

Environmental and social due diligence (ESDD) has been carried out by independent consultants. The ESDD included 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 project will result in significant environmental benefits and improve the quality of the local environment and mitigate public health risks by extending drinking water supply and wastewater collection networks, improving drinking water treatment and quality, improve sewage collection and wastewater treatment systems. 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). As a result of this Project, about 168 thousand people (or circa 98 per cent of the Company’s service area) will benefit from improved water and wastewater services. The project will increase wastewater collection from 33 per cent current to 91 per cent in 2014 and improve water supply connection rate from 72 per cent current to 96 per cent in 2014.

The project is not expected to require any land acquisition or cause any significant displacement or resettlement impacts. However, the construction works will have limited localised and short-term adverse impacts, which can be mitigated or prevented by adhering to good construction practice. There is also a provision in the ESAP to develop a process to address any such disturbance and/or displacement that may occur, in accordance with the Bank’s requirements. No other potential significant adverse impacts or non-compliances with the EBRD performance requirements (PRs) have been identified. The planned tariff increases are not expected to generate affordability challenges for the average and lower income households.

Part of the project components in Sinaia and Breaza agglomerations will be implemented within the Natura 2000 site ROSCI-0013 (Bucegi). This involves limited rehabilitation and extension works at water and wastewater treatment plants, extension of wastewater network (around 600m within the Natura 2000 site), a new trunk line (around 3.6 km within the Natura 2000 site), and some new chlorination stations inside Natura 2000 sites. The environmental authorities concluded that these project components are not likely to have significant impacts on Natura 2000 sites 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 and operation periods. The N2000 declaration that has been issued is conditional to the implementation of these specific measures.

The ESDD established that the Company does not have an integrated management system in place but it is committed to establish a Quality, Environment, Health and Safety Integrated Management System in place and obtain ISO 9001:2000, ISO 14001: 2004, and OHSAS 18001:2004 certificates.

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.

Technical Cooperation

The sub-project will benefit from overall 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 financed by the Government of Spain under the original Framework) and extended for an additional €100,000 to support sub-projects under the Framework extension.
  • Financial due diligence of sub-projects under the Framework extension (€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 (€1,080,000 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 €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

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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.