Sabac Buildings Energy Efficiency

Location:

Serbia

Project number:

51004

Business sector:

Municipal and environmental infrastructure

Notice type:

Public

Environmental category:

B

Target board date:

10 Jul 2019

Status:

Passed Final Review, Pending Board Approval

PSD disclosed:

09 Apr 2019

Translated version of this PSD: Serbian

Project Description

The provision of debt financing to the Sabac District Heating Company (the "Company" or the DH Company or the "Client") to finance implementation of energy efficiency (EE) measures in up to 40 residential multi-store buildings (the "Project") in the City of Sabac, Serbia (the "City").

Project Objectives

Contribution to the implementation of EE measures in up to 40 residential multi-store buildings, including insulation measures and introduction of thermostatic valves, heat allocators, and consumption-based billing system. As residential buildings account for a significant portion of the heating demand, the Project will address a key contributor to the emissions and energy consumption in the City.

Transition Impact

Good.

The Project contributes to the "green" transition impact quality through environmental benefits arising from the reduction of energy consumption in residential buildings. Implementation of high quality energy efficiency measures in buildings, including demand side energy savings measures, is expected to have a strong demonstration effect, especially considering that the current level of penetration of EE technologies in the building sector is very low. It is expected that the reduction of energy consumption and increase in residential energy efficiency can significantly improve the performance of the sector. The targeted level of energy savings will be determined and confirmed during due dilligence.

Client Information

TOPLANA SABAC JKP

Sabac District Heating Company, the sole provider of the district heating in the City.

EBRD Finance Summary

EUR 2,500,000.00

Up to EUR 2.5 million senior loan to the Sabac District Heating Company, fully owned by the City of Sabac.

Total Project Cost

EUR 2,500,000.00

Up to EUR 2.5 million.

Environmental and Social Summary

Categorised B (2014 ESP). This project will have significant benefits related to energy efficiency measures, including improvement to the insulation and introduction of thermostatic valves and heat allocators, resulting in improved energy efficiency and reduced emissions. Environmental and social due diligence (ESDD) comprised of an audit carried out by independent consultants. The findings of the ESDD were that the District Heating Company had some elements of environmental and social management in place and are in compliance with national legislation.

The Project consists of implementing energy efficiency measures in 40 pre-selected multi-storey private residential buildings in densely populated Benska Bara district, located in the centre of Šabac. The Project will result in an estimated average annual savings of 45%, which corresponds to around 5,800 MWh per annum. This will also produce significant environmental benefits through carbon emission reduction of 2,167 tCO2e per annum.

The District Heating Company does not have an E&S Policy, nor operate an Environmental, Health, Safety and Social Management System.  Currently, there is insufficient capacity in the District Heating Company to manage environmental and social aspects, there is however a health and safety specialist (“Officer of Occupational Health and Safety”) in place.  It was determined that a national EIA was not required for this Project under national or municipal law. A Construction Phase Environmental, Health, Safety and Social Management Plan (CEMP) will be developed and implemented by the Contractors; the Company will be required to review and approve the CEMP prior to start of construction. The CEMP will include construction health and safety, construction environmental controls, plans for community health and safety, and emergency preparedness and response plans.

Overall there are detailed and effective management systems employed within the District Heating Company to ensure good adequate labour standards, in line with national legislation. Areas that are lacking, such as anti-bribery and equal opportunities, will be addressed in a project-specific Human Resources Policy to be developed and introduced. Labour condition is currently the responsibility of the Officer for Occupational Safety and Health of the Company. 93% of employees are members of the Trade Union. There is currently no planned major programme of retrenchment across the District Heating Company and no retrenchment has been reported for the past three years.

Resource efficiency and pollution control is not expected to be an issue. Asbestos containing materials may be present.  Therefore an asbestos survey at the proposed building sites prior to the commencement of works is recommended in the ESAP. Overall there is currently a good level of informal occupational health and safety systems and processes at the District Heating Company. The thermal insulation by cladding of exterior walls will be suitably fire-rated by the Supplier, as prescribed to national standards; it will use expanded polystyrene. The ESAP requests that the design engineer submits a fire safety report to the District Heating Company; the external walls of the buildings shall adequately resist the spread of fire over the walls and from one building to another, having regard to the height, use and position of the building.

These buildings are not listed as protected in national law or regarded by the local population as culturally significant. Further, no culturally significant areas were identified as neighbouring these buildings.

A Stakeholder Engagement Plan is being developed. It includes engagement with the building representatives, consultation with business owners, and Open Door Days. An informal grievance mechanism is currently in existence, though not documented; a formal documented grievance mechanism will be included as part of the Stakeholder Engagement Plan.

The ESAP is under preparation and will have to be agreed with the District Heating Company before signing.

The Bank will monitor the project through annual environmental and social reports provided by the Client, and site visits if necessary.
 

Technical Cooperation

Pre-Signing

  • TC1: Financial and environmental due diligence including preparation of financial models and all environmental and social aspects of project implementation.
     
  • TC2: Advanced procurement support, to assist the City with the preparation of tender documents and handling procurement process.

Post Signing

  • TC3: Project supervision of works execution, to assist the City with the monitoring of the use of proceeds, implementation and supervision support.

Company Contact Information

Slobodan Jerotic
slobodan.jerotic@sabac.org 
+38163494791
https://toplanasabac.rs/
Djure Jaksica 1, 15000 Sabac

Business opportunities

For business opportunities or procurement, contact the client company.

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