R2CF Botosani sub-project

repaying

Translated version of this PSD: Romanian The EBRD is considering providing up to €7.4 million alongside up to €80.9 million from EU Cohesion Funds, as well as the funding from the local and state budget to finance the €102.5 million regional water investment programme of SC Nova Apaserv SA Botosani. The proposed project will assist the Company in extending and rehabilitating the water and wastewater infrastructure in four water supply zones (Saveni, Stefanesti, Bucecea and Catamarasti) and four agglomerations (Botosani, Dorohoi, Flamanzi and Vorona). The investments are expected to significantly reduce water losses, optimize operating costs and expand water supply and wastewater collection and treatment services in the County of Botosani in line with relevant EU directives. Upon implementation of the project, the Company is expected to comply with the following physical indicators: The €7.4 million loan project is a sub-project of the €130 million Extension of the Regional EU Cohesion Fund Water Co-Financing framework (the “Framework”) approved by the Bank to co-finance projects in Romania’s water and wastewater sector alongside EU Cohesion Funds. The project summary document for the Framework was published on 23 September 2010. The sub-project will support environmental improvements and continued regionalisation of water and wastewater services in the County of Botosani, which will result in efficiency gains and the transfer of commercial and managerial skills in water and wastewater operations to less-developed regions of Botosani county. 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 exploring possible involvement of potential private sector in one or more areas of the Company’s operations as a means to achieve operational efficiencies and improve the level of service to the population. SC Nova Apaserv SA is a regional operating company providing water and wastewater services in Botosani County, located in north-eastern Romania. A loan up to €7.4 million for R2CF Botosani. Up to €102.5 million for R2CF Botosani. Categorised B. The potential E&S impacts of construction/rehabilitation of wastewater treatment plants and extension and rehabilitation of water distribution and sewerage networks are likely to be site-specific and can be readily identified and addressed through adequate mitigation measures. The competent environmental authorities undertook EIA screening procedure for individual project components in accordance with applicable Romanian EIA legislation that is harmonized with the EU EIA Directive. Following the screening and public consultations, the authorities decided that EIAs were not required for any of the sub-projects. None of the sub-projects fall under category A in accordance with the Bank's Environmental and Social Policy. Environmental and social due diligence (ESDD) has been carried out by independent consultants. The ESDD included a site visit, review of the Company's existing E&S management systems, available technical and environmental documentation prepared in accordance with Romanian permitting requirements and the project appraisal documents prepared for the EU Cohesion Fund application as well as assessment of the project against EU environmental requirements and the EBRD PRs. The ESDD concluded that the implementation of the sub-projects for water supply and wastewater discharge and treatment will ensure compliance with national and EU legislation within the transition period agreed for meeting requirements of Directive No. 98/83/EC on drinking water quality (by 2015) and Directive 91/271/EC on urban wastewater (from 2013 to 2018 depending on the agglomeration size). The project is not expected to require any land acquisition or cause any significant displacement or resettlement impacts. However, some temporary disturbance may occur during the construction phase. There is a provision within the ESAP to develop a process to address any such disturbance and or displacement that may occur, in accordance with the Bank’s policy. No other potential significant adverse impacts or non-compliances with the EBRD PRs have been identified. The construction works will have limited, localised and short-term adverse impacts, which can be mitigated or prevented by adhering to good construction practice. The ESDD showed that the project will result in significant environmental benefits and improve the quality of the local environment and mitigate public health risks by extending the drinking water supply and wastewater collection networks, improving drinking water treatment and quality, improve sewage collection and wastewater treatment systems. None of the project components are located within Natura 2000 sites and will have no impacts. The ESDD established that the Company doesn’t currently have an integrated ISO 9001, ISO 14001, and OHSAS 18001 management system in place. However each department operates based on a list of procedures. An Environmental and Social Action Plan (ESAP) has been developed for mitigation of identified E&S issues and impacts during preparation, construction and operation of the project, and to bring the Company's operations into compliance with the EBRD's PRs. The Company will provide the Bank with annual environmental and social reports, including updates on the implementation of the ESAP. The Bank will commission a completion audit and may also conduct monitoring visits, as required. The sub-project will benefit from overall TC under the original Framework and its extension, including: