ESIF: Stara Zagora Water Subproject

repaying

Provision of a loan of up to EUR 7 million to Stara Zagora Water Supply and Sanitation Company ("Company"), a water utility serving the region of Stara Zagora. The Company is 100 per cent stateowned through the Ministry of Regional Development and Public Works. The loan will be funded by EBRD capital resources and the European Structural and Investment Funds and the national budget of the Republic of Bulgaria (jointly referred as "ESIF contributions"). The ESIF contributions are earmarked to be used in the form of repayable financial instruments. The proceeds of the loan will finance the rehabilitation of the water supply system and wastewater collection infrastructure serving the region of Stara Zagora, jointly with investment grants from the EU "Operational Programme Environment" 2014-2020 (the "Project"). The main objectives of the Project are: (a) to help the Company achieve compliance with the EU Urban Waste Water Treatment Directive in all agglomerations of more than 10,000 people serviced by the Company and (b) to improve the efficiency of water supply services, reduce the share of nonrevenue water and fulfil the requirements of the EU Drinking Water Directive. Good The Transition Impact stems from the Project's strong environmental benefits (reducing water losses, connecting more people to centralised sewage and waste water treatment, and introducing wastewater treatment in compliance with EU Directives), the reduced dependence on full grantbased financing of investments as well as the strengthening of the Company's financial and operational performance through technical cooperation (TC). WATER AND SEWAGE COMPANY OF THECITY OF STARA ZAGORA Stara Zagora Water Supply and Sanitation Company is a state-owned utility that provides water and sanitation services to 12 municipalities in the region of Stara Zagora with approximately 300 thousand inhabitants. EUR 4,100,000.00 The loan will amount to EUR 7 million, of which EUR 4.1 million will be funded by EBRD's ordinary capital resources (the "EBRD Tranche") and EUR 2.9 million in ESIF contributions from the EBRDEU Special Fund (the "ESIF Tranche"). The ESIF financial resources are being managed by the Bank and the Fund Manager of Financial Instruments in Bulgaria ("FMFIB") signed in October 2018. EUR 50,500,000.00 The total project costs will be majority-financed with EU investment grants and co-financed with the proceeds of the loan. The Project is categorised B in accordance with the 2014 Environmental and Social Policy. The key environmental and social ("E&S") risks and impacts will be mainly construction related: particularly health and safety of workers and public during excavation activities; temporary restrictions of access; increased noise, dust and vibration levels; and contractor management. The environmental and social due diligence will be undertaken by TC funded consultants and will include a review of compliance with national legislation, EU standards, including the drinking water directive, and the Bank's PRs. It will also review the potential for permanent or temporary resettlement and appropriate mitigation. Depending on the results of E&S due diligence and resulting recommended mitigation measures the EBRD may need to agree additional requirements with Stara Zagora WSSO. A Non-Technical Summary (NTS), Stakeholder Engagement Plan (SEP) and ESAP will be developed. This section will be revised with the results of the environmental and social due diligence. EBRD has envisaged the following donor-financed technical cooperation (TC) for the Project and the Company: Rumen Ralkov secretary@wik-stz.com 00359 42 651 345 00359 42 651 345 http://wik-stz.com/bg/ 62 Hristo Botev Street 6000 Stara Zagora