Tashkent Water Improvement Project

Location:

Uzbekistan

Project number:

49277

Business sector:

Municipal and environmental infrastructure

Notice type:

State

Environmental category:

B

Approval date:

19 Sep 2018

Status:

Signed

PSD disclosed:

22 Oct 2021

Project Description

The provision of a sovereign loan of up to US$ 30 million (€25 million) to the Republic of Uzbekistan to be on-lent and/or granted to the water utility Limited Liability Company Toshkent Shahar Suv Ta'minoti, formerly known as the State Unitary Enterprise SuvSoz to finance its Priority Investment Programme (PIP). The PIP includes such investments in water and wastewater infrastructure of the City of Tashkent as construction of a waste water collector, installation of pumps, valves and pressure regulators.

Project Objectives

The Project will rehabilitate and extend the wastewater and water infrastructure in Tashkent delivering multiple environmental benefits, including (i) the increase in the number of people connected to water and wastewater networks by around 280,000 and 390,000 residents, respectively, (ii) the reduction of water losses and (iii) energy savings.

Transition Impact

ETI score: 61

The sources of transition impact are:

1) Green. The Project is expected to increase the number of people connected to the wastewater and water networks, increase the amount of wastewater treated, reduce water losses and deliver energy savings through improved pumping regimes and reduced water losses in the system. Therefore, the Project qualifies as a positive environmental activity.

2) Resilient. The Project will focus on financial and operational improvements to achieve cost recovery and sustainability of the Company.

Client Information

UZBEKISTAN SOVEREIGN

EBRD Finance Summary

USD 30,000,000.00

Total Project Cost

USD 30,000,000.00

Environmental and Social Summary

The Project has been categorised B in accordance with the EBRD's 2014 Environmental and Social Policy. The Environmental and Social Due Diligence (ESDD) for the proposed Priority Investment Programme (PIP) for the Project was carried out as part of the Feasibility Study by independent consultants engaged under the IPPF. It included a review of current practices, an assessment of the Project's potential E&S impacts and a review of the Company's current E&S provisions and management capacity. All PIP components will be subject to local permitting procedures and EIA law (OVOS) in the future. An Environmental and Social Action Plan (ESAP) has been developed for the Project and will be agreed with the Company under a separate Project Agreement prior to Board approval. A Stakeholder Engagement Plan (SEP) and a non-technical summary (NTS) have also been developed and will be disclosed.

 

The investments under the PIP will increase the collection rate and connect a new area of Tashkent to the network. At present, wastewater is collected and treated at three WWTPs: Salar, Bozsu and Bektimir. The WWTPs have been recently renovated, which significantly improved their pollution load removal rate, but did not equip them for nutrient removal. The results of the ESDD show that all WWTPs are not compliant with the national requirements in terms of wastewater quality and the EU Urban Waste Water Treatment Directive, both in terms of treated wastewater quality and the requirement for tertiary treatment. The main reason for non-compliance with the national and the EU directive standards is the high discharge of untreated industrial wastewater to the WWTPs (approx. 30-50 per cent of the influent is of industrial origin for Salar and Bozsu, and 80 per cent for Bektimir). Although the catchment (river Chirchiq) has not been classified as sensitive according to the Urban Waste Water Treatment Directive, it is proposed to consider the receiving water bodies as sensitive since the discharge is to irrigation channels and a river with potential water reuse for domestic and agricultural purposes. Therefore, following a precautionary approach, it is assumed that the EU Directive standards for sensitive areas need to be achieved at all three WWTPs. An ongoing programme led by the National Environmental Committee and the Project Company relates to the enforcement of pre-treatment of industrial discharge. This will significantly improve the performance of the municipal treatment plants in the nearest future.  While there are no measures in the PIP for investment in the WWTPs, the Long Term Investment Strategy is expected to bring the WWTPs' performance in compliance with the Directive. 

 

Adverse E&S impacts associated with the implementation of the PIP will be limited, localized and temporary, and can be prevented or mitigated by adhering to good construction practices. Temporary economic impacts related to construction of the Karakamish collector will be further assessed and managed under the Livelihood Restoration Framework prepared for the Project. The findings of the local EIA, which is yet to be undertaken, and resulting recommended mitigation measures, will need to be incorporated into the Environmental and Social Management Plan for the Project.

  

Achieving full compliance with the EU environmental standards for water and wastewater systems would require additional long-term investments estimated at over USD 266 million. Therefore, on account of constraints arising from affordability and limited financial resources, derogation from the EBRD's Environmental and Social Policy is sought in relation to the EU drinking water quality and wastewater treatment and discharge standards. The human health implications of the shortfalls from the EU standards are assessed to be minor compared to the substantial benefits of the implementation of the PIP, resulting in more reliable, efficient and better quality water supply to the local population as well as improved wastewater management. Expected results include significant improvement of the sanitary conditions of the Yunusabad and Almazar districts, minimising the risk of water-borne diseases and decreasing the overall pollution load directly discharged to the environment, and improvements for the operational efficiency and health and safety of employees and contractors.

 

The ESAP requires the Company to implement a number of improvements designed to meet the EBRD's PRs. The key ESAP actions are related to: improved EHS and HR policies and procedures; implementing an E&S management system; contractors' EHS and labour management programme; improved water supply and wastewater quality monitoring; odour assessment and management plan; dry sludge management plan, development of H&S Plan for contractors; and implementation of the SEP together with a public grievance mechanism.

 

The Bank will monitor the implementation of the Project and the ESAP as well as the Company's environmental and social performance by reviewing the Company's annual environmental and social reports and undertaking monitoring visits as needed.

Technical Cooperation and Grant Financing

Pre-signing:

  • TC 1: Technical, financial, environmental and social due diligence. The assignment's cost was EUR 344,000, funded by Infrastructure Project Preparation Facility (IPPF).

 

Post-signing:

  • TC 2: Corporate Development Support  to the Company to enhance its institutional, operational and financial capacity. The assignment's cost is estimated at EUR 200,000, to be financed by an international donor or the EBRD Shareholder Special Fund.

Company Contact Information

Head of PIU
po.ebrd@uzsuv.uz
+99855-503-12-55
+99855-503-12-55
http://uzsuv.uz
1 Niyozbek Yuli street, Tashkent City, 100035, Uzbekistan

PSD last updated

22 Oct 2021

Understanding Transition

Further information regarding the EBRD’s approach to measuring transition impact is available here.

Business opportunities

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General enquiries

Specific enquiries can be made using the EBRD Enquiries form.

Environmental and Social Policy (ESP)

The ESP and the associated Performance Requirements (PRs) set out the ways in which the EBRD implements its commitment to promoting “environmentally sound and sustainable development”.  The ESP and the PRs include specific provisions for clients to comply with the applicable requirements of national laws on public information and consultation as well as to establish a grievance mechanism to receive and facilitate resolution of stakeholders’ concerns and grievances, in particular, about environmental and social performance of the client and the project. Proportionate to the nature and scale of a project’s environmental and social risks and impacts, the EBRD additionally requires its clients to disclose information, as appropriate, about the risks and impacts arising from projects or to undertake meaningful consultation with stakeholders and consider and respond to their feedback.

More information on the EBRD’s practices in this regard is set out in the ESP.

Integrity and Compliance

The EBRD's Office of the Chief Compliance Officer (OCCO) promotes good governance and ensures that the highest standards of integrity are applied to all activities of the Bank in accordance with international best practice. Integrity due diligence is conducted on all Bank clients to ensure that projects do not present unacceptable integrity or reputational risks to the Bank. The Bank believes that identifying and resolving issues at the project assessment approval stages is the most effective means of ensuring the integrity of Bank transactions. OCCO plays a key role in these protective efforts, and also helps to monitor integrity risks in projects post-investment.

OCCO is also responsible for investigating allegations of fraud, corruption and misconduct in EBRD-financed projects. Anyone, both within or outside the Bank, who suspects fraud or corruption should submit a written report to the Chief Compliance Officer by email to compliance@ebrd.com. All matters reported will be handled by OCCO for follow-up. All reports, including anonymous ones, will be reviewed. Reports can be made in any language of the Bank or of the Bank's countries of operation. The information provided must be made in good faith.

Access to Information Policy (AIP)

The AIP 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 following its entry into force on 1 January 2020. Please visit the Access to Information Policy page to find out what information is available from the EBRD website.

Specific requests for information can be made using the EBRD Enquiries form.

Independent Project Accountability Mechanism (IPAM)

If efforts to address environmental, social or public disclosure concerns with the Client or the Bank are unsuccessful (e.g. through the Client’s Project-level grievance mechanism or through direct engagement with Bank management), individuals and organisations may seek to address their concerns through the EBRD’s Independent Project Accountability Mechanism (IPAM).

IPAM independently reviews Project issues that are believed to have caused (or to be likely to cause) harm. The purpose of the Mechanism is: to support dialogue between Project stakeholders to resolve environmental, social and public disclosure issues; to determine whether the Bank has complied with its Environmental and Social Policy or Project-specific provisions of its Access to Information Policy; and where applicable, to address any existing non-compliance with these policies, while preventing future non-compliance by the Bank.

Please visit the Independent Project Accountability Mechanism webpage to find out more about IPAM and its mandate; how to submit a Request for review; or contact IPAM  via email ipam@ebrd.com to get guidance and more information on IPAM and how to submit a request.

 

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