Taraz Water

Location:

Kazakhstan

Project number:

42664

Business sector:

Municipal and environmental infrastructure

Notice type:

Public

Environmental category:

B

Approval date:

23 Oct 2015

Status:

Repaying

PSD disclosed:

30 Sep 2014

Project description

The EBRD is providing a loan up to KZT 1.05 billion (EUR 3.5 million equivalent) to the State Communal Enterprise "Taraz Su", a sole water distribution and wastewater management company in the city of Taraz in Kazakhstan, to support the rehabilitation and upgrade of the water system in the City.

Project objectives

The Loan will be used to finance priority capital investments, including modernisation of pumping stations, rehabilitation of depreciated sections of water supply networks, introduction of SCADA system and expansion of zonal and building-level water metering (the "Project"). This will result in enhanced energy efficiency, reduced consumption of water and losses in the system, and improved environmental standards.

Transition impact

This project would deliver:

  • Commercialisation of the Company by means of introduction of Public Service Contract that will establish a contractual relationship between the Company and the City Akimat;
     
  • Energy efficiency improvements in the operations of the Company through the modernisation of the water supply facilities;
     
  • Introduction of commercial water tariffs covering the full costs of service for all customer groups as part of the priority investment programme (“PIP”) agreed with the tariff regulator.

The client

State Communal Enterprise ''Taraz Su'', a sole water distribution and wastewater management company in the city of Taraz, Kazakhstan.

EBRD finance

A senior loan to the company in the amount of up to KZT 1.05 billion (EUR 3.5 million equivalent).

Total project cost

KZT 2.38 billion (EUR 7.9 million equivalent) including co-financing from the Government of the Republic of Kazakhstan ("GOK") under the Enhanced Partnership Framework Agreement ("EPFA"), related technical cooperation to support the Company with the project preparation and implementation.

Environmental impact

Categorised B under the 2008 Environmental and Social Policy. An Environmental and Social (E&S) analysis of the proposed PIP and an E&S audit/review of the existing facilities, operations and management practices of the Company have been carried out as part of the Feasibility Study by independent consultants. The investigations concluded that the implementation of the proposed PIP will significantly improve efficiency and reliability of water supply in the city of Taraz, increase access to safe drinking water and reduce public health risks. PIP will focus on rehabilitation of drinking water supply and distribution systems and operations. Adverse E&S impacts are expected to be limited to construction works and will be localised, short-term and prevented or mitigated by adhering to good construction practice.

Water supply facilities operated by the Company are currently in poor operating condition resulting in unreliable water supply, substantial water losses (30 per cent or 4.8 million m³ a year) and high energy consumption. The current water quality is generally good with the available analysis results showing only a few non-compliances with microbiological quality standards. Through the implementation of the PIP, the reliability of the water supply services will be significantly improved and water losses will be considerably reduced by up to 20 per cent from the current level saving over 1 million m3 of water per year by the completion of the construction in 2019. Improvements of the water supply system will improve public health through mitigating the risk of water cross-contamination and water-borne diseases. Modernisation of the laboratory facilities will improve overall control of the water quality allowing both national and EU standards for drinking water quality to be met.

Wastewater collection and treatment operations are not part of the Project; however, improvements in the wastewater infrastructure are included in the Company's long-term investment programme. A new modern wastewater treatment plant (WWTP) is planned to be constructed with budgetary resources in the next stage of the Company's long-term investment plan.

The E&S review identified that the capacity of the Company to manage E&S issues is low and their E&S management systems, occupational health and safety (OHS) and stakeholder engagement practices require further improvement to meet EBRD's Performance Requirements (PRs). Specifically, several non-compliances have been identified in terms of the Company's OHS management and performance. The key issues of concern are related to unsafe work practices, lack of the PPE use, inadequate enforcement and training. OHS management practices will need to be further enhanced, specific OHS provisions will need to be introduced in tender documentation for contractors. Particular attention should be given to taking necessary precautions for high risk activities during the construction phase, such as working in excavation pits and confined spaces.

The Environmental and Social Action Plan (ESAP) requires the Company among others to further develop their environmental, health and safety management system, procedures and practices; provide adequate EHS training, upgrade water quality monitoring laboratory facilities, provide adequate management and monitoring of OHS practices for staff and contractors, develop safe asbestos handling and disposal procedures, design and construct a new modern WWTP as part of their long-term investment plan, improve stakeholder engagement and grievance mechanism practices. A draft Stakeholder Engagement Plan has also been developed for the Company.

The Company will submit annual E&S reports to the Bank, and monitoring visits will be carried out as necessary.

Technical cooperation

Pre-signing

  • Feasibility Study for Taraz. EUR 150,000, financed by the EBRD Shareholder Special Fund ("SSF").

Post-signing

  • Support to the Project Implementation Unit ("PIU") including Procurement, Engineering, Design and Contract Supervision. The consultants will assist the Company's PIU with technical design, procurement, contract award and administration, financial control, overall project management, and quality assurance. The estimated cost of this assignment is EUR 600,000, proposed to be financed by the GOK under the terms of EPFA.
     
  • Corporate Development Programme to (i) assist the Company to improve its corporate, financial and operational efficiency measures to meet the related covenants included in the EBRD financing documents as well as on-going corporate development and (ii) assist the Company to prepare and implement the PSC with the City. The estimated cost of this assignment is EUR 320,000, proposed to be financed by the GOK under the terms of EPFA.

Client contact data

Gulmira Mukhatova , CFO
+7 707 4284423
gulmira19_78@mail.ru
Kazybek Bi, 136
Taraz, 080000
Kazakhstan

 

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

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