R2CF Braila Sub-Project

repaying

Translated version of this PSD: Romanian The EBRD is considering providing up to €8.8 million alongside up to €74 million from EU Cohesion Funds, as well as the funding from the local and state budget to finance the €95.7 million regional water investment programme of the SC Compania de Utilitati Publice Dunarea SA Braila. The proposed project will assist the Company in extending and rehabilitating the water and wastewater infrastructure in 45 administrative territorial units representing nearly two thirds of the population in Braila County. As a result of the project more than 300,000 inhabitants in the project area will have access to a safe supply of water and to sanitation services. The €8.8 million loan project is a sub-project of the €200 million R2CF Framework approved by the Bank to co-finance projects in Romania’s water and wastewater sector alongside EU Cohesion Funds. The sub-project will support environmental improvements and continued regionalisation of water and wastewater services in Braila County, which will result in efficiency gains and the transfer of commercial and managerial skills in water and wastewater operations to less-developed regions of the county. SC Compania de Utilitati Publice Dunarea SA Braila provides water and wastewater services to the City of Braila as well as to three other localities (Ianca, Faurei and Insuratei) and 41 smaller rural communities in the County of Braila. An existing client of the Bank under the Municipal and Utilities Development Programme II, the Company became a regional operating company in 2009 and began extending its service area throughout the entire County of Braila. A loan up to €8.8 million for Braila Sub-Project. Up to €95.7 million for Braila Sub-Project. 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 harmonised with the EU EIA Directive. Following the screening and public consultations, the authorities decided that EIAs were not required for any of the sub-project. None of the sub-projects involves any WWTPs with a capacity more than 150,000 p.e.. Therefore 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 requirements 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 significant land acquisition or cause any significant displacement or resettlement impacts. However, some temporary disturbance may occur during the construction phase. No other 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 planned tariff increases are not expected to generate affordability challenges for the average and lower income households. 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. 67 per cent of the county population (over 200,000 people) will benefit from improved water and wastewater services. The project will increase wastewater collection from 82 per cent current to 99 per cent in 2014 and improve water supply connection rate from 92 per cent current to 99 per cent in 2014. Part of the project components (water well field) in Insuratei agglomeration will be implemented within a NATURA 2000 site. The environmental authorities concluded that raw water extraction for water supply system is not likely to have significant impacts on Nature 2000 sites and that no appropriate assessment was required of the project.. The screening decision and environmental notification present measures for the minimization of the impact on the sites during the construction period, respectively operation period. The Natura 2000 declaration has been issued conditional to the implementation of these specific measures. The ESDD established that the Company’s existing EHSS management systems are well developed and it has an integrated ISO 14001, ISO 9001, and OHSAS 18001 management system in place. 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 ESAP commits the Company amongst others developing site specific E&S Management Plans for each sub-project; enhancement of EHS training programmes; establishment of relevant procedures and a compensation action plan/policy so as to meet the requirements of PR5, in the event of involuntary resettlement or economic displacement impacts occurring, performance monitoring, cultural heritage chance find, handling and disposal of materials containing asbestos; revision of sludge management plans; and adopting and implementing Stakeholders Engagement Plan compliant with EBRD PR 10. 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 Framework, including an analysis of the environmental and social impacts, issues and risks and a gap analysis (€125,100 - financed by Spain), institutional and financial due diligence (€74,800 - financed from the EBRD’s own resources) as well as a benchmarking and FOPIP programme (€750,000 - financed by the EBRD’s Shareholder Special Fund).