Bodrum Water

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Translated version of this PSD: Turkish The EBRD is considering providing a loan to finance a priority investment programme in the water services sector in the Municipality of Bodrum.The objective of a proposed project is to reduce water losses expand the water network connections and improve wastewater treatment. The project will also help the Municipality to improve the operations of the municipal water department by separating it from the general operations of the Municipality through the creation of a separate water corporation to increase transparency and autonomy and making the new municipal water corporation operate in an autonomous commercial basis. Transition impact will focus on completing the corporatisation of water and wastewater services, assistance to the Municipality to reform tariffs, the preparation of a business plan and increase transparency with the introduction of international financial reporting standards. In addition, the project will seek to introduce a public service contract to regulate the relationship between the Municipality and the new corporation with the measurable financial and operational improvement targets. The Municipality of Bodrum (the “Municipality”) a resort municipality on the South Aegean coast of Turkey and the Bodrum municipal water services department. Senior loan to the Municipality of up to €7.5 million or equivalent in TRY to finance the modernisation of water and wastewater infrastructure in Bodrum. Up to €8.7 million, including EBRD Financing: up to €7.5 million, Local Contribution: €0.5 million and TCs: €0.7 million. This project has a significant potential for improving the coverage, quality, and efficiency of the water supply and wastewater collection and treatment systems in Bodrum. The potential adverse future environmental and social (E&S) impacts of priority investments for the rehabilitation and modernisation of the corporation’s existing water supply and wastewater collection and treatment facilities are likely to be site-specific and can be readily identified and addressed through adequate mitigation measures. Therefore, the Project has been categorised B. The environmental and social due diligence (ESDD) for the project including 1) an independent environmental and social audit/review of the corporation’s current operations and facilities, 2) an analysis of potential environmental and social issues associated with the proposed priority investment programme, 3) a review of the corporation’s existing management systems on environmental and social issues, and 4) development of a Stakeholder Engagement Plan, is currently on-going. Upon completion of the due diligence an Environmental and Social Action Plan (ESAP) will be prepared and agreed with the corporation. This PSD will be updated once the ESDD is completed to reflect the findings and the agreed mitigation measures and corrective actions. The Bank is supporting the project in several ways through the provision of technical cooperation. The Bank mobilised its own resources to cover the environmental and social due diligence and EBRD Shareholder Special Fund financing to cover the technical and financial feasibility of the project. As part of the project implementation, the Bank will support the Municipality with the design, procurement and construction supervision of the investments (€375,000). Additionally, the municipality will be supported with the institutional development of their municipal water services department and its transformation into an autonomously operating municipal water corporation through a corporate development programme. There will also be a public consultation and stakeholder consultation component to improve customer awareness of the objectives of the project and gather feedback (€310,000). Both implementation TCs will be financed by international donors via the EBRD’s technical cooperation funds programme.