Project description and objectives
The EBRD has provided a long-term loan to TOO Vodnye Resursy Marketing, a private water operator in Shymkent. The EBRD assists in increasing private sector participation in the water market in Kazakhstan by supporting the Company’s ongoing investment plans. The proposed loan has financed a priority investment programme in the water services sector in the city of Shymkent. The transaction is focused on modernization of water and wastewater systems of the Company.
This transaction has contributed to promoting private sector operations through supporting one of the first and best performing private operators in Kazakhstan. The Project has supported institutional strengthening, and introduced an incentive-based service contract in Shymkent. The project has contributed to improving tariffs, corporate governance and business standards of the Company.
TOO Vodnye Resursy Marketing, a private water operator in the city of Shymkent in the South of Kazakhstan.
A senior loan of USD 8.0 million.
Total project cost
USD 8.4 million
Screened B/1 under 2003 Environmental Policy.
The project will improve drinking water quality, efficiency of water supply system, and sewerage collection and treatment infrastructure and services in the City. Environmental due diligence consisted of an environmental analysis of the impacts associated with the priority investment programme (PIP), and environmental audit of the current operational performance and the existing infrastructure. It also reviewed the corporate policies and procedures applied by the Company in managing environmental, health and safety and social issues. Environmental due diligence did not identify any existing non-compliances with national legislation and regulatory requirements or EU environmental standards for drinking water quality and wastewater discharges. Nevertheless, a number of key actions and measures have been proposed for the Company's Environmental and Social Action Plan (ESAP) in order to ensure reduction of future contamination risks and maintaining the same compliance in the future.
The investigations showed also that the PIP would not result in any significant negative environmental or social impact and would provide substantial environmental and social benefits compared to the existing situation. However, minor temporary negative environmental or social impacts might occur due to construction activities like emission of exhaust gases, soil disturbance, waste generation, etc. Appropriate mitigating measures have been included in the ESAP to minimise or prevent these temporary impacts.
The ESAP includes key measures aimed at preventing of possible soil and groundwater contamination at well fields (PCB testing, and monitoring other pollution sources); preventing, reducing and controlling the impacts of flooding; preventing Hepatitis A and intestinal infections by improving disinfection, introducing sanitary control of water protection zones, reducing leakages in water distribution network; improving laboratory capacity for carrying out drinking water and wastewater monitoring and analysis; improving health and safety and labour protection practices; planning for sludge management liquidation option. ESAP has been agreed with the Company for implementation during the Project. B-level disclosure will be completed before the Final Review.
Update on Environmental Impact (as of 17/10/2016)
The below update covers all three loans of the EBRD to TOO Vodnye Resursy Marketing (OPID 39302 – this project, OPID 40803 and OPID 47489).
An environmental and social due diligence (“ESDD”) has been carried out in August-October 2016 by independent consultants to help with the decision for the envisaged changes to the project as well as the new project components to be included under OPID 47489. The ESDD has confirmed a good progress with respect to the implementation of the Environmental and Social Action Plans (“ESAP”) for this project as well as the other projects with the Client. In addition to the completed improvements to the wastewater collection and treatment infrastructure implemented with the previous EBRD loans, one of the main achievements since 2008 has been introduction of a certified environment management system in accordance with ISO 14001:2004, and an occupational health and safety management system in accordance with OHSAS 18001:2007.
The ESAP for the project has been updated to cover the issues . The key additional actions in the updated ESAP relate to monitoring, formalising health and safety practices, asbestos management, traffic management, redefinition of the sanitary protection zone, strengthening of laboratory control procedures and increasing environmental, health and safety training of staff. The Stakeholder Engagement Plan has also been updated. Both the ESAP and SEP are covenanted in the Loan Agreement to be implemented by the Company.
- Preparation of a feasibility study, EUR 189,000, funded from the EBRD Shareholders Fund.
- Preparation of a Performance-Based Service Agreement, EUR 190,000.
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