Tajik Water II - North Water Rehabilitation

Location:

Tajikistan

Project number:

47040

Business sector:

Municipal and environmental infrastructure

Notice type:

Public

Environmental category:

B

Target board date:

10 Dec 2014

Status:

Cancelled

PSD disclosed:

26 Sep 2014

Translated version of this PSD: Russian

Project Description

The Tajik Water II Project (the Project) would be an additional project under the Integrated Approach and provide financing to further advance important water supply and wastewater improvements in the 20 cities where the Bank already works through KMK.

As part of the Project preparation, Long Term Investment Programmes and Priority Investment Programmes have been developed for the five Regional Water Companies (RWC) under the Project.

The EBRD is considering supporting the Tajik Water II - North Water Rehabilitation Sub-Project. The EBRD would extend a loan of up to USD 8 million in two tranches to the North Regional Water Company (NRWC) and Khojagii Manziliyu-Kommunali (KMK), the owner of the NRWC, on a joint and several basis. The Republic of Tajikistan would provide a sovereign guarantee. The EBRD will also seek an investment grant of USD 8 million from an international donor to facilitate implementation of the important investments within prevailing affordability constraints.

The Sub-Project consists of two tranches:

1) Tranche I (committed) - USD 4 million to 3 cities (Kanibadam, Gafurov and Chkalovsk)

2)Tranche II (uncommitted) - USD 4 million to 3 cities (Karaikkum, Taboshar and Isfara).

Building on the achievements under the Bank’s Integrated Approach to water projects in Tajikistan, the overall objectives of this Project are to: (a) further rehabilitate the water supply and make selected wastewater improvements; and (b) establish the NRWC to further improve financial and operational management in the water sector.

Transition Impact

Transition Impact of the Sub-Project would be:

  • The proposed Sub-Project will help establish a regional company, the North Region Water Company;
  • Establish a governance structure with the participation of local municipalities
  • Establishment of a contractual arrangement between NRWC and the participating cities;
  • Elaborated tariff reform with regional adjustments;
  • Establishment of high corporate governance standards and introduction of a formal consultation process with water users in form of a community based stakeholder participation programme.

The Client

Khojagii Manziliyu-Kommunali (KMK) and North Regional Water Company (NRWC) as joint and several co-borrowers.

EBRD Finance

Loan of up to USD 8.0 million in two tranches under a sovereign guarantee to NRWC and KMK on a joint and several basis. The loan will be co-financed by an international donor providing grant financing in an amount up to USD 8.0 million.

Project Cost

The total Sub-Project cost is USD 17.3 million including technical cooperation.

Environmental Impact

The Sub-Project has been categorised B under the 2008 Environmental and Social Policy.

An Environmental and Social Audit/Review of the water companies’ current EHSS management practices, operations and facilities, and an Environmental and Social Analysis of the proposed Priority Investment Programme (PIP) were carried out as part of the Feasibility Study by independent consultants. The implementation of the proposed PIP is expected to significantly improve efficiency, reliability and quality of water supply and wastewater collection in the participating cities, thus contributing to the provision of uninterrupted access to safe drinking water, prevention of ground and watercourses pollution and improvement of public health.

PIP components will mostly involve renovation of the existing assets such as rehabilitation of the existing water intakes and supply networks and limited rehabilitation of the existing wastewater pumping stations and treatment facilities not involving any new developments. Any adverse future environmental and social impacts associated with the Project are site-specific and readily addressed through adequate mitigation measures. The implementation of PIP involves construction works that will result in limited, localised and short-term adverse environmental impacts, which will be mitigated or prevented by adhering to good construction practice.

The due diligence investigations showed that the NRWC has weak EHSS management capabilities and underdeveloped EHSS management systems, and that their current occupational health and safety and stakeholder engagement practices require further improvement to meet EBRD's Performance Requirements (PRs).

The due diligence concluded that for all localities the reliability and quality of the drinking water supply will be significantly improved to meet local requirements, however additional further long-term investments into water networks and treatment would be required to bring it in full compliance with EU standards.

At this time the financing for the long-term investment programme from the Companies’ own revenues cannot be confirmed and no potential sources of external funding has been identified. Therefore, on account of constraints arising from affordability and limited financial resources, derogation from the EBRD’s Environmental and Social Policy is sought.

The ESDD showed that the Project will have a significant positive impact on health and the environment despite the Project not being able to achieve full EU compliance in the short term. The human health implications of the shortfalls from EU standards are assessed to be minor compared to the benefits of the PIP implementation to deliver a safer and more reliable water supply to the local population.

Environmental and Social Action Plans (ESAPs) have been developed for the NRWC to bring it into compliance with national regulations and to meet EBRD's PRs, where financially feasible.

E&S considerations have also been incorporated into the associated TCs to help NRWC build its corporate EHSS capacity and implement the ESAP.

NRWC will be monitored in terms of its environmental and social performance and implementation of the ESAP through annual E&S reports and visits when necessary.

Technical Cooperation

The following post-signing technical co-operation (TC) assignments are envisaged as part of this sub-project:

  • Project Implementation Support. International consultants to assist the project implementation unit with engineering design, procurement, preparation and evaluation of tenders, contract award and administration, financial control, sub-project management and reporting. The estimated cost of the assignment is USD 800,000, proposed to be financed by an international donor.
  • Corporate Development and Stakeholder Participation Programme:

    (i) to support institutional development in the form of operational improvements and financial improvements to secure the sustainability of the newly established NRWC; and

    (ii) to implement a Stakeholder Participation Programme. The estimated cost of the assignment is USD 500,000, proposed to be financed by an international donor.
 

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

Public Information Policy (PIP)

The PIP sets out how the EBRD discloses information and consults with its stakeholders so as to promote better awareness and understanding of its strategies, policies and operations. Please visit the Public Information Policy page below to find out how to request a Public Sector Board Report.
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.