Ufa Vodokanal

completed

Ufa (the “City” of “Ufa”), the capital of the Republic of Bashkortostan located in the Urals region, has had problems with the quality and capacity of its existing wastewater networks and treatment facilities since the 90’s, which has resulted in unsatisfactory treatment of wastewater, disposal of some untreated wastewater into the river Belaya (Volga basin) and non-compliance with relevant national environmental standards. To resolve these problems, the City launched a staged long-term sewerage program, implemented by its 100%-owned municipal company Ufa Vodokanal (“UVK” or the “Company”). This rehabilitation program has been supported in part by an IBRD loan of $20.8 million disbursed over 2006/2007 and by an EBRD loan of RUB500 million (approximately $15-16 million) signed in 2007. The Company provides water supply and sewage wastewater treatment services, of which about 80% are provided directly to the population of the city. The proposed IFC Project is a loan to help the Company complete the construction of a much needed 3rd wastewater treatment block within its existing wastewater treatment plant (the “WWTP”). The IFC Project includes the construction of the third block/unit for biological treatment and to refinance a part of its existing short-term debt. The IFC loan will complement the earlier IBRD and EBRD support to help advance the City’s wastewater rehabilitation program. Building additional processing capacity will allow the City to: (i) eliminate discharge of untreated wastewater into the River Belaya and improve the compliance with relevant national standards; (ii) improve the quality of wastewater treatment at existing plants, which are currently overloaded; (iii) gradually modernize its existing plants with advanced technology and higher operational efficiency; and (iv) reduce risks of overflow and accidents that would affect the City and its surrounding areas. The IFC loan will also help the Company to refinance some of its short-term debt with longer tenor, thus reducing capital risk.