Municipal Environmental Loan Facility (MELF)

complete

The project is designed to provide co-financing to EU-ISPA funded investments in the water, waste-water and solid waste management sectors, in several municipalities to be identified during the next phase of project development. The first project approved by EU-ISPA Management Committee with EBRD co-financing is the Rehabilitation of the Waste Water facilities in Constanta. The project addresses investments in water supply, waste-water and solid waste management facilities to comply with EU-accession requirements on environmental standards. Constanta sub-project is addressing investments in the waste water treatment facilities along the Black Sea Coast and rehabilitation of sewerage networks with the objective of improving the quality of the treated water discharged into the Black Sea to comply with EU standards. Development of sub-sovereign financing instruments. The facility would continue the process started in the previous EBRD programmes in the sector for the institutional development of the municipal utilities. Water and waste-water utilities and solid waste management companies in Romania benefiting from EU-ISPA (Instrument for Structural Policies for Pre-Accession Facility) grant financing available from 2000 to 2006. In Constanta sub-project, the loan would be granted to the water utility (RAJA Constanta) with a County Guarantee. The proposed facility is designed as a framework to provide co-financing to EU-ISPA grant funds for selected municipal utilities and/or municipalities. The total amount of the facility is €130 million. It is estimated that the individual sub-projects included in the framework will receive 50-75% grant funding from EU-ISPA and EBRD co-financing will range between 25-50% from the total cost of the sub-projects. The total cost of Constanta sub-project is €100.4 million. New investment through the Municipal Environmental Loan Facility in the water and waste-water sectors in various municipalities in Romania, which started with the Municipal Utilities Development Programme I (MUDP I) and continued with MUDP II, would further significantly contribute to improving the quality and reliability of the drinking water supply. It would also reduce public health hazards and pollution of surface and ground-water sources by improving effluent quality and municipal solid waste management. The project offers the opportunity to introduce water and waste-water management systems, which are resource efficient and provide high quality of drinking water and treated effluent. In addition, a municipal solid waste management component, once fully implemented, it would reduce hazards to public health and add to full protection of water resources in selected municipalities. Individual sub-projects under the Municipal Environmental Loan Facility may involve environmental issues relating to building of new and/or upgrading of existing water, waste-water and municipal solid waste management facilities. Most of the impacts will be of short duration and will be minimised through incorporation of good practice, including forewarning and signing of works, restriction of working hours, development of traffic management schemes offering alternative routes to traffic and pedestrians, etc. Environmental summary for sub-project Oradea EBRD is considering financing the water and wastewater utility in Oradea, APA CANAL, which will be guaranteed by the City of Oradea to complement grant financing from EU-ISPA under MELF. The approved ISPA grant funding to APA CANAL is €16.7 million. The proceeds of the proposed loan will be used to finance the rehabilitation of the wastewater and sludge treatment plants, while the ISPA grant will be used to co-finance rehabilitation of the wastewater and sludge treatment plant, and refurbishment and extension of the sewer network, pumping stations, technical assistance in institutional strengthening to develop tender documents, procurement and site supervision. This project presents significant environmental opportunities regarding improving the quality of effluent and sludge management thus reducing the threat to public health and pollution of water resources. The environmental investigations were carried out within the framework of the EU-ISPA facility. The project will enable Romania to comply with this EU Directive (EU Council Directive 91/271/EEC of 21 May 1991 concerning Urban Wastewater Treatment) and to contribute to the fulfilment of the Romanian obligations under: Based on the findings of the Environmental Impact Assessment, environmental impacts of this project are assessed to be temporary and will be mitigated with the application of good management practices. Once the project is completed and operational, it will improve effluent and sludge treatment of the City of Oradea, and it will enable Romania to comply with the relevant EU Directives. ISPA funds are being used for the technical preparation of the project. The Dutch Government is assisting the process of preparation of a creditworthiness analysis of the municipalities and municipal utilities involved.