Yakutsk Water Modernisation Project

Location:

Russia

Project number:

44313

Business sector:

Municipal and environmental infrastructure

Notice type:

Public

Environmental category:

B

Target board date:

01 May 2013

Status:

Repaying

PSD disclosed:

31 Oct 2012

Translated version of this PSD: Russian

Project Description

The EBRD is considering to provide a senior loan up to RUB 2,100 million (~EUR 51.7 million) to Open Joint Stock Company “Vodokanal” (The “Company”) a public utility enterprise responsible for the provision of water supply and wastewater services in the City of Yakutsk (the “City”), the capital of the Republic of Sakha (Yakutia) (the “Republic”). The proceeds of the proposed loan will be used to co-finance Company’s Priority Investment Programme (the “PIP”) aimed at rehabilitation and modernisation of the water intake and water supply systems in the City and necessary energy efficiency improvements. The PIP components include construction of

(i) basin pond for water intake with extended capacity;

(ii) pumping station (including installation of energy efficient pumps);

(iii) water treatment plant modernisation;

(iv) series of smaller investments targeting energy efficiency improvements.

Transition Impact

Transition impact is expected to be achieved through the:

  • Introduction of a Regulatory Agreement which will govern the relationship between the Company, the City and the Republic and specify the rights and responsibilities of each party to improve service levels;
  • Improvement in the tariff methodology to ensure achievement of full cost recovery and incentives for cost efficiency;
  • Demonstration of successful cost restructuring including reductions in operating and maintenance costs.

The Client

Open Joint Stock Company “Vodokanal”, a public utility company located in Yakutsk, wholly owned by the Republic of Sakha (Yakutia), responsible for provision of water supply and waste water services in the City.

EBRD Finance

Senior loan of up to RUB 2,100 million (~ EUR 51.7 million) to the Company.

Project Cost

Up to RUB 3,956 million (~EUR 97.4 million).

Environmental Impact

The proposed project has been categorised B in accordance with the 2008 EBRD Environmental and Social (E&S) Policy, as the potential impacts are expected to be site specific and readily identifiable and addressed through mitigation measures.
Environmental and social due diligence (ESDD) of the Company and the project was undertaken by independent consultant, consisting of an E&S audit of the Company's management systems and practices, the existing facilities and operations, and an E&S analysis of the impacts and benefits of the proposed priority investment programme (PIP).

The ESDD confirmed that the Project will enable the Company to modernise water supply system to improve quality of water supplied to the residents of the City of Yakutsk and to improve energy efficiency of drinking water supply and wastewater treatment collection systems. The ESDD concluded that any adverse future environmental and social impacts resulting from the project implementation will be temporary, and limited to the Company’s operational and project construction/modernisation sites.

An Environmental and Social Action Plan (ESAP) will be prepared for the project. The ESAP requires the Company to further develop, improve and implement its EHSS management system; obtain the necessary permits; carry out public disclosure in line with national requirements; introduce efficient construction and maintenance contractors' EHSS management and performance monitoring practices; and implement a Stakeholder Engagement Plan and a grievance mechanism.

The Company will be required to provide the Bank with annual environmental and social reports, including updates on the implementation of project and the ESAP in compliance with EBRD PRs.

Technical Cooperation

Pre-signing

  • IFRS audit for 2010-2011 (EUR 43,150, financed from the Bank’s own resources).
  • Technical and environmental due diligence (EUR 80,000, financed from the EBRD Shareholder Special Fund)

Post signing

  • Financial optimization programme development and structuring of Public Service Contract (~EUR 285,000, to be financed by an international donor or EBRD Shareholder Special Fund).
  • Project Implementation Consultants to assist the Company in setting up the project implementation unit and to support it with preparation of tender documentation at initial stages of the project implementation. (~EUR 355,000, to be financed by an international donor or EBRD Shareholder Special Fund).
  • Project Engineer for the construction and works supervision (~ EUR 1,600,000, to be financed by the Company or from the loan proceeds)
 

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.