The proposed project will refinance part of the existing Zagreb Solid Waste Programme (ZGOS) municipal loan and finance the completion of the last two landfill cells in order to comply with the EU standards and protect the nearby water sources of Zagreb.
The loan for the new investment component and the re-financed amounts will not have a financial guarantee by the City. Instead, the loan will be supported by a Municipal Support Agreement relating to responsibilities of the City in relation to tariff policy, corporate governance and regulatory framework. This will make this transaction the first non-guaranteed direct public utility loan in Croatia by the Bank.
Further transition impact will be achieved through development and implementation of a Service and Operational contract between ZGOS and Zagreb, within the context also of a wider waste disposal strategy of the City.
ZGOS is a City-owned company in charge of operations of the Jakusevac landfill and rehabilitation of the existing dump into a sanitary landfill. Its main revenue source is fee payments for municipal solid waste disposal.
A/B loan of €40 million to ZGOS secured by a Municipal Support Agreement by the City of Zagreb. EBRD loan of €23 million and B Loan of €17 million to be offered for syndication to other banks. The A/B loan ratio and syndication level will be at same level as under previous municipal loan structure.
The project was screened C/1. This project will finance the completion of two landfill cells as part of ongoing rehabilitation of the waste dump into a sanitary landfill under the Zagreb Solid Waste Management Project. There is no change to the scope of the rehabilitation project which will continue to bring significant environmental improvements to the protection of groundwater sources of the City of Zagreb and to the adequate municipal solid waste disposal in a sanitary landfill in accordance with Croatian and EU environmental standards.
Detailed environmental due diligence, inclusive of an Environmental Impact Assessment, was carried out for the Zagreb Solid Waste Management Project. It confirmed the ability of the project to bring the existing facilities into compliance with applicable Croatian and EU environmental standards. It also assessed possible environmental liabilities associated with the previous waste management practices and suggested mitigation measures. The project sponsors carried out an extensive public consultation and environmental awareness programme.
Loan funded TC for the development and implementation of Service and Operational contract between ZGOS and the City of Zagreb. No technical cooperation will be used in conjunction with this proposed transaction.
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