Tajik Water II - Central Water Rehabilitation

Location:

Tajikistan

Project number:

47057

Business sector:

Municipal and environmental infrastructure

Notice type:

Public

Status:

Cancelled

PSD disclosed:

27 Jan 2015

Translated version of this PSD: Russian

Project description and objectives

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 - Central Water Rehabilitation Sub-Project. The EBRD would extend a loan of up to USD 8 million in two tranches to the Central Regional Water Company (CRWC) and Khojagii Manziliyu-Kommunali (KMK), the owner of the CRWC, 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 rehabilitate water supply and selected wastewater collection measures in the cities of Gissar, Somoniyon, Shakhrinav and Tursun-Zade.
 
2) Tranche II (uncommitted) - USD 4 million for wastewater management improvements in the cities of Gissar, Somoniyon, Shakhrinav and Tursun-Zade.

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 CRWC 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 Central Region Water Company;
  • Establish a governance structure with the participation of local municipalities
  • Establishment of a contractual arrangement between CRWC 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

SUE Khojagii Manziliyu Kommunali (KMK) and Central Regional Water Company (CRWC) as joint and several co-borrowers

EBRD finance

Loan of up to USD 8.0 million in two tranches under a sovereign guarantee to CRWC 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.

Total project cost

The total project cost is USD 17.3 million including technical cooperation. The project will be co-financed by an investment grant from an international donor.

Environmental and social categorisation, impact, and mitigation

The Sub-Project has been categorised B.

The environmental and social due diligence (ESDD), has included a review of the due diligence documents and reports for the earlier project with the Company and an independent environmental and social audit/review of the Company's current operations and facilities (focusing on the issues identified during the ESDD for the first project), and an analysis of potential environmental and social issues associated with the proposed priority investment programme. Improvements in Company's environmental and social management systems were also reviewed and assessed.

Currently around only 24 per cent of the population is connected to the sewer system (41,000 out of 170,000 people). The Central Tajik Water Rehabilitation project included only limited investments related to wastewater systems which aimed to increase the connection rate to wastewater collection system by 4 per cent. During the present project, a further 17 per cent will be connected to the wastewater collection system. In addition, wastewater treatment will be provided for Somoniyon, Shakhrinav and Tursun-Zade. Although the treated wastewater will not satisfy the EU discharge standards, the basic treatment to be provided will still be a significant improvement compared to the existing situation.

The project will also help improve the public health by improving the water quality through on-site disinfection, reducing infiltration into water supply system, increasing the availability and reliability of water services, and better control of water quality through investments in laboratory equipment.

The ESDD showed that the project will have a significant positive impact on public health despite the fact that the project is not able to bring the Company’s' operations into EU compliance in the short term. To bring the water supply system into compliance with the EU standards, additional investments of USD 8-12 million would be required (network rehabilitation and extension, abstraction areas, water meters, etc.). To achieve full compliance in wastewater collection and treatment an estimated additional investment of USD 16-24 million would be necessary (EU compliant wastewater treatment plant, network extension, increase of connection rates, etc.).
 
Altogether, additional long-term investments of estimated USD 24-36 million would be required to bring water and wastewater systems to fully meet EU requirements. At this time the financing for the long-term investment programme from the Company’s 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 human health implications of the shortfalls from EU standards are assessed to be minor compared to the benefits of the PIP implementation resulting in more reliable water supply to the local population. To minimise the associated health risks to the local communities, awareness raising programmes will be developed as part of mitigation plans and implemented to prevent risks of water borne diseases.

The ESDD showed that so far insufficient progress has been made to implement of the ESAP requirements.  The Company still has weak Environmental Health and Safety (EHS) management capabilities and underdeveloped EHS management systems, and the current occupational health and safety and stakeholder engagement practices require further improvement to meet EBRD's Performance Requirements (PRs). Lessons from the Central Tajik Water Rehabilitation project will need to be carefully assessed by the post-signing Corporate Development Programme consultants to ensure that the Company build their corporate environmental and social capacity and implement the Environmental and Social Action Plan (ESAP). The Bank will closely monitor the implementation of the post-signing Corporate Development Programme TC to ensure compliance.

The agreed ESAP includes the following main actions:
 
  • Develop an EHS Programme for future corporate structure;
  • Develop and implement an EHS Training Programme ;
  • Provide Personal Protection Equipment for workers ;
  • Develop and implement health and safety measures during waste water collection, disposal and sludge handling;
  • Develop and Implement a Health and Safety Plan;
  • Provide supporting equipment to increase workers safety;
  • Provide firefighting equipment for operational yard of Water Utility;
  • Develop / adapt firefighting procedures;
  • Develop a training programme to ensure that water utility staff has knowledge of water borne diseases;
  • Raise public awareness on health issues due to poor sanitation and wastewater collection;
  • Establish annual monitoring and reporting arrangements;
  • Finalize and implement Stakeholder Engagement Plan;
  • Develop and implement a Water Safety Plan;
  • Develop and implement an Emergency Plan for case of insufficient water quality;
  • Revise HR policy and procedures;
  • Establish an internal and external grievance mechanism;
  • Develop and implement chance find procedures;
  • Define the requirements for contractors and suppliers;
  • Establish, maintain, and strengthen as necessary an organisational structure;
  • Implement the defined mitigation measures during the design, construction and operational phases.

The Company will provide the Bank with annual environmental and social reports, including updates on the implementation of the ESAP. The Bank may also conduct monitoring visits, as required.

Technical cooperation

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

Pre-Signing
 
  • Feasibility Study: to assist the Bank with due diligence, including investment component selection from the existing Long Term Investment Plans and preparation of a procurement plan for each RWC, an environmental and social due diligence update, a creditworthiness and financial analysis, legal due diligence and an institutional analysis on the proposed project structure. The cost of the assignment is USD 475,000, financed by the Government of Austrian.
Post-Signing
 
  • Project Implementation Support: 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 CRWC; 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.
For consultant opportunities for projects financed by technical cooperation funds, visit procurement of consultants.  
 

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.

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