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2008-07-04 00:00:00
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| Project name: |
Arad District Heating |
| Country: |
Romania |
| Project number: |
38133 |
| Business sector: |
Municipal and environmental infrastructure |
| Public/Private: |
Public |
| Environmental category: |
B |
| Board date: |
10 February 2009 |
| Status: |
Passed concept review, Pending final review |
Date PSD disclosed:
Date PSD updated: |
4 July 2008
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| Local language translation: |
Traducere în limba română  |
| Date translation disclosed: |
18 July 2008 |
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Project description
and objectives:
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The EBRD is considering providing up to EUR 15 million to S.C.Centrala Electrica de Termoficare Arad S.A (“CET Arad”), the municipal district heating company of the City of Arad, to finance the modernisation and environmental upgrade of one of two plants owned by the company to enable it to comply with EU legislation as well as to improve its operating efficiency. Specifically, the project will convert one of the plant’s boilers from lignite to gas as well as rehabilitate a portion of the company’s distribution system. It is projected that this investment programme will result in a reduction of fuel consumption of about 10-20%, as well as achieve significant savings in electricity and water supply. In addition, the project will improve the quality of heat services provided to the consumers.
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Transition impact:
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It is expected that the programme will save about 10-20% of heating energy (fuel), up to 50% of electricity and a significant amount of water supply in the selected regions and will increase the quality of heat services provided to the consumers The project will serve as an example of complete district heating systems operated with modern technology in one part of the system (main No 3) and will gain important experience showing the right way forward for other areas in Arad.
The project promotes legal and regulatory reforms, including the implementation of a Public Service Contract and a Municipal Support Agreement establishing the adequate level of support from the City to the company on a commercial basis.
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The client:
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S.C.Centrala Electrica de Termoficare Arad S.A (“CET Arad”), the municipal district heating company of the City of Arad.
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EBRD finance:
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Loan of up to EUR 15 million to CET Arad. It is expected that approximately EUR 5 million thereof will be syndicated.
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Total project cost:
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EUR17.5 million.
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Environmental impact:
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Screened B/1; an Environmental Analysis and Audit will need to be carried out as part of the planned Feasibility Study by reviewing environmental and health and safety management and compliance. This will quantify environmental benefits and impacts to assess carbon trading potential of the project and develop an Environmental Action Plan (EAP) incorporating mitigation measures, as needed. The implementation of this EAP will be covenanted. Efficiency upgrades of existing district heating systems and boilers are associated with limited diverse impacts and will result in significant environmental benefits. The company is planning to adopt ISO 9001 quality management and ISO 14001 environmental management systems. Preliminary investigations show that there is an opportunity for about 300,000 tonnes per annum of CO2 saving and a potential for carbon credit through the implementation of this project.
The legal documentation will include environmental covenants to ensure that the Company conducts its business and carries out the project in accordance with Romanian environmental laws and regulations and with EU environmental standards; complies with relevant national employment laws and standards and Conventions of the International Labour Organisation related to the employment of children and young people, discrimination at work, and forced labour; adopts and implements an Environmental Action Plan to address corrective measures needed at the existing facilities; provides annual environmental, health and safety reports; notifies the Bank on material issues relating to accidents or incidents with environmental, health or safety implications; and arranges periodic environmental audits and monitoring visits by Bank staff or appointed representatives, if and when deemed necessary.
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Technical
cooperation:
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The project is already benefiting from a technical, financial and institutional Feasibility Study funded from the Sweden - EBRD Technical Cooperation Fund – Ministry of Foreign Affairs.
It is expected that further technical co-operation assistance will be provided to assist CET Arad with their corporate development including a full financial and operational improvement programme to encourage institution-building and skills transfer.
For consultant opportunities for projects financed by technical cooperation funds, visit procurement of consultants.
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EBRD contact:
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Anca Ocroteala, Operation Leader: ocroteaa@ebrd.com
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Procurement or tendering
opportunities:
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Visit EBRD Procurement
Enquiries: Tel: +44 20 7338 6794; Fax: +44 20 7338 7472, Email: procurement@ebrd.com
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General enquiries:
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EBRD project enquiries not related to procurement:
Tel: +44 20 7338 7168; Fax: +44 20 7338 7380
Email: projectenquiries@ebrd.com
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