Tajik Water Regionalisation Project

Location:

Tajikistan

Project number:

48349

Business sector:

Municipal and environmental infrastructure

Notice type:

Public

Status:

Cancelled

PSD disclosed:

26 Feb 2016

Translated version of this PSD: Russian

Project Description

The EBRD is considering supporting the Tajik Water Regionalisation Project. The EBRD would extend a sovereign loan of up to USD 42.6 million in tranches to Tajikistan, on-lent to Regional Water Companies (RWC). The EBRD will also seek investment grants of USD 54.6 million from international donors to facilitate implementation of the important investments within prevailing affordability constraints.

Project Objectives

The project would build on achievements under the EBRD's Integrated Approach in the Tajik water sector. RWCs have been created, and the Bank's existing loan agreements with individual water companies in 19 cities need to be amended. In conjunction with the legal amendments, the Bank is also considering providing additional financing for supplementary water and wastewater infrastructure improvements.

The project would also support institutional strengthening and capacity building in the newly established RWCs to further improve financial and operational management in the water sector.

The EBRD loan is tranched as follows:

  • Tranche 1a in the amount of USD 16.1 million. The Tranche will be on-lent to the North RWC. Grant co-financing is provided by Swiss SECO in the amount of USD 18.5 million as well as the Global Environmental Facility of USD 2.7 million.
     
  • Tranche 1b in the amount of USD 13.4 million. The Tranche will be on-lent to the North RWC. Grant co-financing is provided by Swiss SECO in the amount of USD 6 million, by Bank's Water Fund in the amount of USD 0.85 million, as well as an international donor in the amount of USD 7.2million.
     
  • Tranche 2 in the amount of USD 6.6 million. The Tranche will be on-lent to the Central RWC. Grant co-financing is provided by IFCA in the amount of EUR 6 million (~USD 6.6 million) as well as the EBRD's Shareholder Special Fund in the amount of USD 2.6 million.
     
  • Tranche 3 in the amount of USD 6.5 million. The Tranche will be on-lent to the South RWC. Grant co-financing is provided by IFCA in the amount of EUR 5.4 million (~USD 5.95 million) as well as the EBRD's Shareholder Special Fund in the amount of USD 4.2 million.

Transition Impact

Transition Impact would be:

  • Regionalisation of the water sector that will improve institutional sustainability;
     
  • Establish a governance structure with the participation of local municipalities;
     
  • Establishment of a contractual arrangement between the RWCs and the participating cities;
     
  • Elaborated tariff reform with regional adjustments; and
     
  • 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.

Client Information

TAJIKISTAN

Republic of Tajikistan, with on-lending arrangements to the RWCs.

EBRD Finance Summary

USD 42,600,000.00

A sovereign loan of USD 42.6 million in tranches, co-financed by capital grants in the amount of USD 54.6 million.

Total Project Cost

USD 97,200,000.00

USD 97.2 million

Environmental and Social Summary

Categorised B under the 2008 Environmental and Social Policy.

An Environmental and Social Audit/Review of the current Environmental Health and Safety and Social (EHSS) management practices, operations and facilities, and an Environmental and Social Analysis of the proposed investment were carried out as part of the Feasibility Study by independent consultants. The implementation of the proposed project 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.

Investment 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 the investment components 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 RWCs have 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 RWC's own revenues cannot be confirmed and no potential sources of external funding have 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 RWCs 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 the RWCs to build its corporate EHSS capacity and implement the ESAPs.

The RWCs 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

Existing technical co-operation (TC) in support of these investments will benefit of the RWCs.

The following post-signing TC assignments are envisaged where the capacity of the RWC is still determined to be inadequate to ensure success implementation:

  • 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 each assignment is up to 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 RWCs; and (ii) to implement a Stakeholder Participation Programme. The estimated cost of each assignment is up to USD 500,000, proposed to be financed by an international donor. 

Company Contact Information

Ravshan Dadabaev
gup-hmk@mail.ru
+9923722337793
+992372217798
N Karaboev Street 56 734018 Dushanbe Tajikistan

Business opportunities

For business opportunities or procurement, contact the client company.

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Email: procurement@ebrd.com

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Text of the PIP

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