Sisak Water II

Location:

Croatia

Project number:

47382

Business sector:

Municipal and environmental infrastructure

Notice type:

Public

Environmental category:

B

Status:

Cancelled

PSD disclosed:

08 Apr 2015

Translated version of this PSD: Croatian

Project Description

     
The EBRD is considering a senior loan in the amount of up to EUR 9.2 million to Sisacki Vodovod, which is envisaged to consist of 2 tranches:
 
  • Tranche A of up to EUR 7.2 million to replace the existing EBRD loan, signed in 2010 for the co-financing (with EU funds) of the upgrade and extension of the wastewater network and the construction of the wastewater treatment plant in the City of Sisak. The new wastewater treatment plant will bring significant environmental benefits to the wider area famous for its three rivers (Kupa, Sava and Odra).
     
  • Tranche B for an additional amount of up to EUR 2.0 million for the financing of priority investments for the upgrade of the existing water supply network, through the replacement of pipes which in some areas are in excess of 60 years old. This investment will significantly reduce non-revenue water, resulting in a positive impact on the Company’s operating performance.

Transition Impact  

                                                                        
The transition impact of the proposed transaction will be achieved through:
 
  • Regionalisation of the water companies in the wider service area, aimed at increasing the quality coverage to smaller outlying communities and improved operational efficiencies of water companies in the country.
     
  • Performance benchmarking through which the Company will be involved in a sector-wide activity of monitoring and benchmarking of water sector companies, aimed at the promotion of economic efficiencies
     
  • Certification of the Company’s procurement activities by a recognised international professional institution
     
  • The expected transition impact rating is ‘moderate to good’.

The Client

 
Sisacki Vodovod is a limited liability company, providing water supply and wastewater collection and treatment services to the inhabitants of the City of Sisak and municipalities of Martinska Ves, Sunja and Lekenik. The Company is majority (96.57 per cent) owned by the City of Sisak. The Company provides annually 2.7 million m3 of water to households and industrial consumers and collects 1.4 million m3 of wastewater in the current sewage network.
 
The City of Sisak is the economic and political centre of the Sisak – Moslavina county. It is located 60 kilometres south east from the country’s capital Zagreb.
 

EBRD Finance

 
Senior loan of up to EUR 9.2 million to the Sisak Water Supply and Wastewater Company the “Company”), consisting of 2 tranches:
 
  • Tranche A in the amount of up to EUR 7.2 million to replace an existing EBRD loan signed with the Company in 2010
     
  • Tranche B in the amount of up to EUR 2.0 million for the financing of priority investments in the upgrade of the existing water supply network, through the replacement of pipes.

Project Cost

 
Total Project costs amount to EUR 28.5 million.
 

Environmental and social categorisation, impact, and mitigation
 

Categorised B (2014). The upgrading of the existing water supply network in Sisak will provide further benefits to the existing  project of the Bank in Sisak to improve wastewater services (Tranche A investments). Any adverse future environmental and social impacts associated with the proposed project are expected to be site-specific and readily addressed through adequate mitigation measures.
 
Tranche A of the project involves replacing an existing project to which EBRD’s 2003 Environmental Policy applies. The environmental and social due diligence (ESDD) will expand on the previous due diligence and implementation of Tranche A and include an independent review of the Company's E&S management systems, HR practices, current operations and facilities, and an analysis of potential environmental and social issues associated with the proposed investments under Tranche B. An ESAP will be developed to address the finding of the E&S due diligence and bring the Company’s E&S performance into compliance with PRs.
 
The PSD will be updated once the results of the ESDD become available.
 

Technical Cooperation

 
Technical Cooperation will be provided as described below:
 
Pre-signing
 
1. Environmental and Social Impact Assessment of the Project in the amount of up to EUR 30,000, financed from the Bank's own resources. This assessment will be conducted in order to check whether the procedures and policies utilised by the Company during the Project preparation adhere to the EBRD's environmental and social standards.
 
Post-signing
 
1. Project Preparation (Tranche B), Design, PIU Support and Supervision (EUR 250,000): proposed to be financed by an international donor or the SSF to provide assistance to the Company in detecting the emergency investments required in the water supply network, which will result in significant water leakage reduction. Based on the detected emergency investments, the TC consultants will work on the preparation of the project design, assistance to the Company in the process of the project implementation (with a special emphasis on procurement support) and finally for the supervision of the construction works. Although the start of the TC is envisaged prior to the project signing, the duration of the assignment, especially the works supervision will expand throughout the implementation period.
 
2. Regional Consolidation Support (EUR 150,000): proposed to be financed by an international donor or the SSF, to provide assistance to the Company and the City in finding the optimal legal, organizational and technical solutions for the prospective regional consolidation of the water companies within the wider service area.
 
3. Performance Benchmarking (EUR 50,000): proposed to be financed by an international donor or the SSF, to provide assistance to the Company in participating in a country-wide exercise of benchmarking of key operational and managerial indicators.
 
4. Procurement Certification (EUR 45,000): proposed to be financed by an international donor or the SSF, which will be utilized for the assistance to the company in the process of procurement certification, with the final goal of obtaining the internationally recognized procurement certificate.
 

Company Contact
 

Srdjan Maric, director

srdjan.maric@sisackivodovod.hr
Sisacki vodovod,
Obala Rudjera Boskovica 10,
 44 000 Sisak, Croatia
Telephone +385 44 526 166
 

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

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Email: projectenquiries@ebrd.com

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