R2CF Bihor Sub-Project

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Translated version of this PSD: Romanian The EBRD is considering providing a loan of up to EUR 8.6 million to S.C. Compania De Apă Oradea S.A. (the Company) for water and wastewater infrastructure improvements in Bihor county, in northwestern Romania. The EBRD loan will co-finance a EUR 83.3 million regional investment programme supported by grant funding from the European Union, the Government of Romania and the local governments under Romania’s Cohesion Fund Programme. The project will enable the Company to extend and rehabilitate its network in the County of Bihor as well as to improve water and wastewater services in seven local communities in the County, namely: Oradea, Beius, Tinca, Santandrei, Palota, Girisu de Cris, Tarian, Biharia, Nojorid, Osorhei, Alparea, and Fughiu. Investments are expected to significantly reduce water losses, optimise operating costs and expand water supply and wastewater collection and treatment services in Bihor County in line with relevant EU directives. The EBRD financing is a sub-project of the EUR 130 million extension of the Regional EU Cohesion Fund Water Co-Financing framework for regionalised water companies in Romania (the “Framework”). The project summary document for the Framework was published on 23 September 2010. R2CF Bihor together with other sub-projects under the Framework will support environmental improvements, efficiency gains from continued regionalisation of water and wastewater services and transfer of commercial and managerial skills in water and wastewater operations to less-developed localities. Compliance with the European Union relevant water legislation is also envisaged. Benchmarking will be a key component of the Framework. Under the Framework extension, additional transition impact for this sub-project will be also achieved through procurement capacity building. S.C. Compania De Apă Oradea S.A, a regional operating company providing water and wastewater services in the County of Bihor, located in north-west Romania. EUR 8.6 million to S.C. Compania De Apă Oradea S.A. EUR 83.3 million. The project has been categorised B in accordance with EBRD’s 2008 Environmental and Social Policy. The potential E&S impacts associated with the project components are likely to be site-specific and can be readily identified and addressed through adequate mitigation measures. The project addresses the first phase of investments (priorities) outlined in the Bihor County Plan for the development of the water sector, and it is expected to bring improved water and sewerage services to the local population, increase the connection rates to the water supply and the sewerage collection networks, and to improve the efficiency and the quality of wastewater treatment. The project is designed to meet compliance with the EU Drinking Water Directive and Urban Wastewater Directive in the project area. The due diligence is currently on-going. It includes an E&S review of the Company's existing facilities, operations and management systems to assess the past and current performance, and a gap E&S analysis of the project appraisal documents for the project prepared for the EU Cohesion Fund application to assess compliance with EBRD's Performance Requirements (PRs). An Environmental and Social Action Plan (ESAP) will be prepared and agreed with the Company to address any environmental and social issues identified during the due diligence to achieve and maintain compliance with the Bank's PRs within a reasonable time-frame. The Company will also develop a Stakeholder Engagement Plan, including a grievance mechanism. This PSD will be updated after the due diligence. The project will benefit from TC under the original Framework and its extension, including: