Ust-Kamenogorsk Water

Location:

Kazakhstan

Project number:

47526

Business sector:

Municipal and environmental infrastructure

Notice type:

Public

Environmental category:

B

Target board date:

24 May 2016

Status:

Signed

PSD disclosed:

13 May 2016

Translated version of this PSD: Russian

Project Description

The EBRD is providing a loan of up to KZT 2,247 million (EUR 5.9 million equivalent) to State Communal Enterprise Oskemen Vodokanal, a municipal water and wastewater treatment company in the City of Ust-Kamenogorsk, East-Kazakhstan oblast in the Republic of Kazakhstan, to support the rehabilitation and upgrade of the water and wastewater infrastructure in the City.

Project Objectives

The Loan will be used to finance priority capital investments, full reconstruction of a major water intake and two waste water pumping stations, as well as purchase of specialised vehicles (the "Project"). This will result in enhanced energy and water efficiency and development of monitoring and automation systems.

Transition Impact

This project would deliver:

(i) tariff reforms (tariff increases to cost recovery levels for a critical mass of participating utilities and assistance with the implementation of amendments to the tariff methodology for pilot companies);

(ii) establishment of the contractual arrangement between the public side and the companies in the form of PSC or similar type of agreement;

(iii) installation of meters for a critical level of water connections; and

(iv) commercialisation and capacity building for the participating utility companies (including the increase in collection ratios, preparation and publication of IFRS accounts and training on procurement).

Client Information

OSKEMEN VODOKANAL STATE COMMUNAL ENTERPRISE

GKP Oskemen Vodokanal is a municipally owned sole water distribution and wastewater management company in Ust-Kamenogorsk, Kazakhstan.

EBRD Finance Summary

KZT 2,247,072,640.00

A senior loan to the Company in the amount of up to KZT 2,247 million (EUR 5.9 million equivalent).

Total Project Cost

KZT 4,111,121,067.00

KZT 4,111 million (EUR 10.8 million equivalent) including co-financing from the Government of the Republic of Kazakhstan ("GOK") under the Enhanced Partnership Framework Agreement ("EPFA"), support by the Akimats of East-Kazakhstan Oblast and the City of Ust-Kamenogorsk, and related technical cooperation to support the Company with the project preparation and implementation.

Environmental and Social Summary

Categorised B (2014 ESP). The Priority Investment Programme (PIP) will upgrade parts of the water supply and wastewater treatment system. It will improve its energy efficiency performance and increase reliability of water supply and wastewater disposal services and infrastructure. Adverse environmental and social impacts are expected to be limited to construction works and will be localised and short-term. Impacts on the local community during the construction phase will be primarily associated with emissions and dust, potential short-term nuisance and traffic disruptions, and noise from construction machinery. These impacts will be reduced and mitigated by timely disclosure of information for the affected population and good construction practises, as set out in the Environmental and Social Action Plan (ESAP). Some initial public consultation has taken place, and the client will be required to develop and implement a Stakeholder Engagement Plan.

The PIP forms part of a planned 15-year investment strategy intended to upgrade the entire system. Oskemen Water provides water supply services to 81% of population (or 269,789 residents) in the City and neighbouring communities. Centralised wastewater disposal services are provided to 64% of population (or 212,000 residents). Drinking water is supplied in conformity with Kazakh standard. The existing wastewater treatment process is currently not able to cope with rising pollution loads, largely due increasing industrial effluents and decreasing pre-treatment before discharge to sewers.

This is being addressed through construction of a new wastewater treatment plant, which will be commissioned by the end of 2016. This new WWTP will meet Kazakh and EU effluent discharge standards and will significantly reduce pollution loading on local waterbodies.

An environmental and social audit of the company has been carried out as part of the feasibility study. This audit has identified some significant gaps in the company's compliance with EBRD PRs and Kazakh environmental standard, including the need for a systematic environmental management system and poor sludge management practises. The ESAP has been developed to address the necessary EHS management improvements and define requirements for the implementation of the PIP. Implementing the project and the ESAP will improve the company's environmental and social performance, including reducing waste contaminated with heavy metals, removal of odour emissions associated with sludge digestion, more sustainable use of natural resources, reduction of occupational and community health and safety risks, and improvement of conditions of work in the company. The consultants for the Project Implementation Unit (PIU) Support will support and monitor the implementation of the project and the ESAP, and the company will submit annual environmental and social reports to the Bank.

Technical Cooperation

Pre-signing

Feasibility Study EUR 251,000, financed by the GOK under the terms of EPFA.

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 500,000, 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, which is expected to be a part of CDP consultancy framework, is EUR 230,000, proposed to be financed by the GOK under the terms of EPFA.

Company Contact Information

Yerzhan Aubakirov
secvoda@mail.ru
(7232) 53-29-70
(7232) 53-17-30
www.ukg-vodokanal.kz
59, Pogranichanya St., Ust-Kamenogorsk, Vostochno-Kazakhstanskaya Oblast, 070010,
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

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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.