Duboko Solid Waste

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The proposed project is for the construction of the regional solid waste landfill that will serve nine municipalities (Cacak, Uzice, Bajina Basta, Pozega, Arilje, Cajetina, Kosjeric, Lucani and Ivanjica). In addition, the project includes two lines for separation of recyclable materials as well as administration and laboratory building, a facility for vehicle washing and disinfecting, weight-bridge, power substation, areas for communication and infrastructure (internal roads), and also a protection zone around the site. The intended project furthermore includes 3 transfer stations and transport and closure of existing dumpsites. The closure of the existing dumpsites and purification and rehabilitation of the area are expected to be financed through EAR funding and the Government of Serbia Eko fund. Update 10 October 2016 The project was signed in 2008 when the Bank provided a loan facility to the Duboko company of EUR 5 million for the construction of a regional solid waste landfill. The Bank’s financing complemented a grant financing from the EU, grant provided by the Government of Serbia and contribution from the nine municipalities, totalling to EUR 12.1 million. Due to unexpected landslides that occurred during construction phase, the initial financing plan was increased, hence the total estimated cost for the project was EUR 19.1 million. This financial increase was partly covered with a grant of EUR 2.4 million from the Swedish International Development Cooperation Agency (“Sida”). In order to further stabilise and extend the landfill capacity, Sida financed further technical assistance to prepare a detailed technical study and design for stabilization and expanded landfill capacity. According to the design, the additional investment for stabilization and landfill capacity expansion was estimated at EUR 4.5 million. Sida has committed a second grant to be channelled via the EBRD under the EBRD SWME Fund in the approximate amount of EUR 2.5 million for capex and technical assistance support. The Government of Serbia has indicated that it is ready to provide the balance of EUR 2 million to finance the remaining amount required for completion of the works at the landfill. These works include stabilisation works and a change in design to the landfill to ensure continued stability with increased landfill capacity. The potential environmental and social impacts associated with the change in design and increased capacity have been assessed through an Environmental and Social Impact Assessment (ESIA) process and appropriate mitigation measures designed. The Project will contribute to the transition process by: Framework for markets The Project will the first regional fully landfill compliant with the EU and National solid waste management strategy. It will establish a model structure that can be replicated for the financing of other regional waste management companies in Serbia and will support the implementation of a nation-wide solid waste management programme creating new legal and institutional structures to promote economies of scale, employ new technology and install best practice management techniques. Demonstration effect of new products and processes The transaction, as the first regional waste management project in Serbia will focus on the tariff of waste management services being based on cost recovery principles. The project will introduce market based structures and establish a clear contractual basis among stakeholders in providing waste management services that will provide much needed influence and momentum to move away from the current uneconomic practices that have resulted in a large number of small, illegal and non-compliant landfills. Multi-municipal collaboration A proven example of multi-municipal collaboration would encourage other towns and cities to structure solid waste management on a commercial basis, thereby helping to establish more efficient, sustainable and ecologically sound systems throughout Serbia. The specific commercial structure adopted may be replicated in other regional landfill projects. Duboko Waste Management Company, a utility enterprise established for the purpose of constructing and operating a regional solid waste landfill for nine municipalities. The Company is majority owned and controlled by the municipalities of Cacak and Uzice. Loan of up to EUR 5 million to Duboko secured by a Municipal Support Agreement by the Cities of Cacak and Uzice. EUR 11.9 million Screened A/0. This project will significantly improve environmental conditions in nine municipalies including towns of Cacak and Uzice by improving the municipal solid waste management system and thus reducing the threat to public health. The project envisages the creation of waste collection points (transfer stations) and the construction of the first regional sanitary landfill. The environmental due diligence which needs to be carried out, will assess the ability of the proposed project to bring the facilities into compliance with applicable Serbian and EU environmental standards. Update (10 October 2016) During landfill construction several landslides occurred at the project site which affected the stability and useable disposal area of the landfill. Detailed technical works were undertaken to consider options to stabilise, ensure design capacity and also expand on the capacity of the landfill. Various options were considered with the preferred option being stabilising the lower sections of the landfill and then design waste cells across the valley bottom add further stability but also increased disposal capacity. These stabilisation and expansion works have the potential to result in environmental and social impacts and thus an ESIA was undertaken for the Project. The new Environmental and Social Impact Assessment is available. Assistance to the Company through a Financial and Operational Performance Improvement Programme (FOPIP) aimed at: i) increasing the Company’s operational efficiency; and ii) improving financial control and collection performance. Cost will be approximately EUR 300,000 to be financed from bilateral donors or Trust Funds.