Belarus Environmental Infrastructure Facility

approved

Translated version of this PSD: Russian The EBRD is considering launching the Belarus Environmental Infrastructure Framework Facility (BEIFF) with the Republic of Belarus. The Facility is intended to provide total external financing of up to €27.2 million for up to three secondary municipalities to improve environmental infrastructure and services. Sub – project Vitebsk Waste Water: The project comprises a sovereign loan of €12.5 million to be on-lent to the Vitebsk Water Company. The proceeds will be used to improve the existing wastewater treatment plant and sludge handling facilities. The main investment components are envisaged to include: installation of new overflow weirs; construction of pumping stations, aeration tanks, a distribution chamber and a pressure line; installation of new control equipment, pumps and screens; and, the acquisition of flushing and closed circuit television scanning equipment. The objective of the project is to make investments to improve the water quality of the Zapadnaya Dvina / Daugava River, the Gulf of Riga and the Baltic Sea. In particular, these investments would aim to reduce the phosphorus and nitrogen content of the treated effluent discharges plus reduce the risk of mechanical breakdown. This will help Belarus to comply with HELCOM recommendations and meet the strict Belarusian and EU effluent quality standards. The investments will also reduce energy consumption and CO2 emissions. Sub – project SlonimBiogas: The Project comprise a sovereign loan of €2.85 million to be on-lent to the Slonim Water Company. The objectives of projects is – constructing biogas generation and utilization plant, that would allow usage of wastewater sludge at the treatment plant for the production of biogas and its exploitation in the thermal energy cycle of the company will continually work to save energy, reducing greenhouse gases and volume of sludge at the same time. The project will remove the ongoing need for sludge drying beds, which are a potential source of groundwater pollution. Sub – project Baranovichi Biogas: The projects comprises a sovereign loan of €2.9 million to be on-lent to the Baranovichi Water Company. The objectives of projects is – constructing biogas generation and utilization plant, that would allow usage of wastewater sludge at the treatment plant for the production of biogas and its exploitation in the thermal energy cycle of the company will continually work to save energy, reducing greenhouse gases and volume of sludge at the same time. The project will remove the ongoing need for sludge drying beds, which are a potential source of groundwater pollution. Transition impact will come from: Sovereign loan to the Republic of Belarus with on-lending to the relevant water company at sub-project level as the ultimate beneficiary of the project. €18.25 million loan facility for the entire Framework, co-financed by capital expenditure from various multilateral or bilateral donors. €27.2 million (net of taxes) is the estimated capital expenditure and technical cooperation cost for the entire Framework. All three sub-projects to be financed by the EBRD have been categorised “B” under the 2008 Environmental and Social Policy. Environmental and social due diligence (ESDD) has been carried out by the Bank and independent consultants and consisted of site visits, environmental and social (E&S) audit/review of the Participating Utilities’ existing corporate management systems, facilities and operations, analysis of the E&S impacts and benefits of the Priority Investment Programmes (PIPs) to be financed by the Bank. The due diligence concluded that for all three localities the standards for urban wastewater treatment and sludge management/disposal practices will improve substantially, and that the projects have been structured to comply with relevant EBRD Performance Requirements (PRs). The ESDD showed that the operation will entail significant environmental and social benefits. All three projects will contribute to improving the quality of the local environment and public health and water quality in the Baltic Sea catchment area. The implementation of the PIP in Vitebsk will improve efficiency and quality of wastewater treatment in the City thereby improving the quality of the biological treatment and reducing pollution from nutrient discharges, improving the water quality in Zapadnaya Dvina / Daugava river as well as further downstream in the Gulf of Riga and the Baltic Sea. The WWTP rehabilitation will involve introduction of nutrient removal of nitrogen (N) and phosphorus (P), bringing quality of treated effluent in compliance with the national and EU requirements and closer to HELCOM recommendations. In addition, the project will improve occupational health and safety conditions. The implementation of PIPs in Baranovichi and Slonim will enable heat and electricity generation from sludge biogas and improving efficiency of the sludge management in these two cities thus preventing release of methane greenhouse gas into the atmosphere, reducing air pollution, soil and groundwater contamination and minimising odours. By implementation of the state-of-the-art sludge treatment technology, compliance with national and EU requirements for sludge management can be achieved in both cities. Both sludge biogas projects will also reduce the volume and improve the quality of sludge to be disposed of. In both Baranovichi and Slonim the treated effluents are currently compliant with national norms, and the PIP will help to achieve a 50 per cent reduction of N and P through modification of the aeration tanks in an effort to move closer to EU standards and HELCOM recommendations. Additional small-scale investments in P removal are included in the Environmental and Social Action Plan (ESAP) for both cities so as to meet EU standard and HELCOM recommendation for phosphorus removal by 2016. The implementation of the PIP involves construction works that will result in limited, localised and short-term adverse environmental impacts, which can be mitigated or prevented by adhering to good construction practice. These requirements as well as some additional corrective measures on wastewater treatment and sludge management have also been included into the ESAPs. The planned tariff increases are expected to affect the lower income households, however, the associated grant components and subsidies will mitigate and address affordability constraints. The due diligence showed that the Participating Utilities have some capabilities in Environmental, Health and Safety Management, however their current occupational health and safety and stakeholder engagement practices require further improvement to meet compliance with EBRD PRs. ESAPs have been developed to bring the Participating Utilities into compliance with national regulations and EBRD's PRs. ESAPs include improvements to the companies’ EHSS (environmental, health and safety and social) management systems and procedures, occupational health and safety (OHS) related measures for own staff and the contractors, improvements to the labour and working conditions, fire and emergency response procedures. Draft Stakeholder Engagement Plans (SEPs) for each Participating Utility's PIP have been prepared. Participating Utilities will be required to finalise and implement the SEPs prior to any construction taking place. E&S considerations have also been incorporated into the associated technical cooperation projects to help Participating Utilities build their EHSS capacity and implement the ESAPs. The E&S performance and the implementation of the ESAP and SEP by each Participating Utility will be monitored through annual E&S reports. The Bank will commission a completion audit for the three sub-projects and may also undertake monitoring visits, as required. Project Preparation Project Implementation Additionally, support shall be provided to the Cities/Regions to implement Project Support Agreements, which will be key components of the financial structure for the proposed sub-projects as well as raising institutional capacities within the Cities/Regions to assist them in managing the sub-projects in an effective manner through better financial planning thereby improving their creditworthiness. Additionally, the assignment shall assist the Cities/Regions in the analysis of the baseline social situation of the vulnerable sections of the population and the impact of the sub-projects on these groups, and in connection to this assess any impact of the sub-projects of the equality between men and women. €805,000 – funded by the Government of Finland on an untied basis. The assignment covers support for the five projects initially covered by the BEIFF – two of which are led by the NIB. Reimbursement: the above TC projects are non-reimbursable.