Regional EU cohesion funds water co-finaincing framework R2CF

approved

Sub-projects signed under this framework In November 2010, the EBRD approved a EUR 200 million Framework to co-finance projects in Romania’s water and wastewater sector alongside EU Cohesion Funds. The sub projects financed under the Framework will improve the quality of drinking water in Romania and expand wastewater collection and treatment in line with relevant EU water and wastewater legislation. Since the Framework was approved, the Bank has signed 12 sub-projects, with another one pending. Once these projects are signed, the initial EUR 200 million will have been fully utilised. In light of this strong demand, the Bank is seeking to extend the Framework by an additional EUR 130 million, which will be tranched to co-finance EU Cohesion Fund projects and additional energy efficiency investments. The sub-project financed 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. Benchmarking will be a key component of the Framework. Additional transition impact for sub-projects financed under the Extension will be achieved through increased energy efficiency as well as procurement capacity building. Regionalised water and wastewater utilities in Romania which are accessing EU funds. The subprojects under the Extension will be with the last group of water utilities in Romania benefiting from EU Cohesion Funds under the current programming period ending 2013. EUR 130 million to be lent in EUR or RON under two windows. See sub-projects. The potential environmental and social (E&S) impacts of the planned priority investments in water and wastewater infrastructure are likely to be site-specific and can be readily identified and addressed through adequate mitigation measures. Sub-projects are expected to result in significant community health benefits. One of the eligibility criteria for sub-projects under the Framework and its Extension is approval of the Companies' investment programmes by the EU Cohesion Fund programme. The due diligence for each sub-project will include: • An E&S review of each participating company’s existing facilities and operations and their management systems to assess the past and current performance against relevant Performance Requirements (PRs); and • A gap analysis of the project appraisal documents for the project prepared for the EU Cohesion Fund application to assess compliance with the EBRD PRs. Based on the recommendations of the due diligence an Environmental and Social Action Plan (ESAP) will be prepared for each sub-project. The ESAPs will be structured to bring the existing facilities and operations, including water, wastewater and sludge management/disposal into full compliance with national and EU environmental standards. The participating companies will also develop a Stakeholder Engagement Plan in accordance with PR10. The ESAPs will be part of the legal agreements between the participating companies and the EBRD. The PSDs for sub-projects will summarise the due diligence results and ESAPs. The sub-project will benefit from TC under the original Framework and its Extension, including: