Bishkek Water II sub-project

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Translated version of this PSD: Russian The EBRD is considering supporting the Bishkek Water Supply and Wastewater Rehabilitation Phase II project. The EBRD would extend a sovereign loan of up to €8 million to the Kyrgyz Republic, to be on-lent to Bishkek City for the benefit of the Bishkek Water Company for improvement of water supply and wastewater services. The Phase II Priority Investment Programme to be supported by EBRD will focus on supplementary renovation of the Company’s water supply infrastructure and wastewater collection and treatment in the City. The EBRD will also seek an investment grant from an international donor of €8 million to facilitate the implementation of the project which will address urgently needed water and wastewater infrastructure rehabilitation needs. The transition impact of the project would come from: Government of the Kyrgyz Republic, with on-lending to Bishkek City for the benefit of the Bishkek Water Company. Sovereign loan of up to €8 million to the Kyrgyz Republic, on-lent to Bishkek City for the benefit of the Bishkek Water Company. The total project cost is €17 million including technical cooperation. The sub-project will be co-financed by an investment grant from an international donor. The project has been categorised B in accordance with EBRD’s 2008 Environmental and Social Policy. Environmental and social due diligence (ESDD) has been carried out by independent consultants. The ESDD included a review of the due diligence documents and reports for Phase I; an independent environmental and social audit/review of the Company's current operations and facilities (focusing on the issues identified during the ESDD for Phase I); and an analysis of potential environmental and social issues associated with the proposed priority investment programme. Phase II has been tailored to address some of the remaining environmental, health and social problems and involves drilling of new wells (with total abstraction capacity of 1.26 million m3/year), replacement of water and wastewater pipes, and procurement of laboratory equipment. The due diligence for Phase I had concluded that although the reliability and quality of the drinking water supply in Bishkek would be significantly improved to meet local requirements, additional further long-term investments into water networks and treatment would be required to bring those in full compliance with EU standards. National and EU standards for urban wastewater treatment and sludge management would also not be achieved in full due to poor wastewater collection and inefficient wastewater treatment infrastructure. During the Feasibility Study for Phase I, additional long-term investments required by Bishkek to reach full compliance with EU water and wastewater requirements was estimated over €500 million. The implementation of the proposed Phase II project is expected to further contribute to the improvement of efficiency, reliability and quality of water and wastewater services in the City of Bishkek. However, the additional funding that can be provided through Phase II will be limited to only €16 million plus around €1 million for consulting and engineering, which is far below the investments required to achieve full EU compliance. Therefore, due to constraints arising from affordability and limited financial resources, derogation from the EBRD's Environmental and Social Policy will need to be sought. During the ESDD for Phase I, the human health implications of the shortfalls from EU standards have been assessed to be minor compared to the benefits of the PIP implementation to deliver safer and more reliable water supply and wastewater services to the local population. The ESDD confirmed that Bishkek Water Company has gained experience in environmental management through the corporate development and capacity building components of Phase I. Bishkek Water Company has internalized a level of environmental management in several departments and functions. However, roles and responsibilities are not systematically assigned yet. There still is a lack of systematic approach to environmental management and compliance monitoring. Hence, further capacity strengthening will be needed. Bishkek Water Company has put health and safety (H&S) procedures in place and maintains records of accidents. Causes of potential hazards to workers are identified and minimized. Personal protective equipment such as gas masks is provided and their use is enforced. A training programme has been put in place. Still modernisation of some safety measures is required. The ESDD has also showed that the project will not result in any land acquisition or economic displacement and will not involve any construction activities within sensitive areas. The environmental and social (E&S) impacts associated with the project implementation are site-specific and can be addressed through adequate mitigation measures. An Environmental and Social Action Plan (ESAP) has been developed for mitigation of identified E&S issues and impacts during preparation, construction and operation of the project. The Company will provide the Bank with annual environmental and social reports, including updates on the implementation of the ESAP. The Bank may also conduct monitoring visits as required. The following technical co-operation (“TC”) assignments are envisaged as part of this project: Pre-signing Post-signing For consultant opportunities for projects financed by technical cooperation funds, visit Consultancy Services.