Project description
and objectives:

The proposed project will allow Apa Canal 2000 S.A. Pitesti to address key infrastructure needs of Pitesti city and its outskirts and is designed to improve efficiency of services provided by Apa Canal, combined with continuing EU Instrument of Structural Policies for Pre-Accession (EU - ISPA) investments in the water and wastewater sector.

The EBRD loan of up to €7 million will enable the Apa Canal to efficiently increase its service area through connection of previously unserved communities adjacent to Pitesti city to the main water supply and sewerage network.

The EBRD investment entails the construction of:

• 15 km of new sewerage network
• 28 km of new water supply network, and
• Rehabilitation of 6 pumps for the pumping system to ensure sufficient pressure to supply water in the network extension and installation of 3 new storage tanks.

Transition impact:

• Expansion of water and wastewater services in the region will enable the company to provide services to the population on an even and unfragmented basis. Scale up of its operations will expand regionalisation of the company and transform it into an operator with strengthened institutional capacity and increased ability to apply commercial business practices across enlarged service area. It will also allow the company to achieve economy of scales to achieve and substantial efficiency gains.
  
  
• Framework for markets: The project will promote cost recovery principles at the local level, with tariffs set to recover costs within affordability limits, greater application of metering, and more of a commercial approach to revenue collection.

The client:

S.C. Apa Canal 2000 S.A. Pitesti.

EBRD finance:

Senior loan of up to EUR 7 million to the Company.

Total project cost:

Up to 9 million.

Environmental impact:

Screened B/1.

The project is expected to have significant positive environmental impact due to improved quality and efficiency of water supply and sewage services in the area of Pitesti City. Environmental impacts associated with partial reconstruction and expansion of water and wastewater services from municipality of 210,000 consumers to the region of 350,000 consumers, accompanied by a major investment in improvement of water supply and wastewater collection can be readily identified and addressed through adequate mitigation measure using good management practices. Therefore an environmental analysis including an auditing of relevant water and wastewater management facilities are required in the area of Pitesti City. No other environmental issues to rise at this stage.

Environmental review summary

1. Description of the project

S.C. APA CANAL 2000 S.A. Pitesti, a joint stock water and wastewater utility (the “Company”), has requested the European Bank of Reconstruction and Development (the “EBRD”) to provide financing in support of their priority investment programme (PIP) to improve the quality and efficiency of drinking water supply and sewerage collection services by restructuring water services in the Arges region. The Project will allow to connect 35,000 new consumers in previously unserved towns and communes in the vicinity of Pitesti City to the already existing main water supply and sewerage network, and is expected to contribute to decreased health risks associated with the current low quality drinking water and poor sanitation in the area.

The proposed PIP includes the construction of the following components:

1) 15 km of new sewerage network pipes;
2) 28 km of new water supply network pipes; and
3) Rehabilitation of 6 pumps for the pumping system to ensure sufficient pressure to supply water in the network extension and installation of 3 new storage tanks.

2. Environmental classification and rationale

The EBRD has classified this project B/1. The project is associated predominantly with the rehabilitation and expansion of water supply and sewerage networks. This will result in limited adverse environmental and social impacts and in significant health and environmental benefits, which can be readily identified and addressed through adequate mitigation measures. An environmental analysis of the proposed investment plans and an environmental review of the existing facilities and operations of the Company have therefore been undertaken.

3. Information reviewed during the environmental appraisal

The environmental appraisal has been based on the review of the Environmental Assessment section of the Arges Regional Water Project Preparation / Feasibility Study report, prepared by independent consultants from Royal Haskoning and the Technical University of Bucharest in March 2008, as well as the additional information on Company’s environment, health and safety compliance provided by the Client.

4. Environmental and social issues

The environmental due diligence revealed that the Company has recently developed and certified a range of management systems related to environmental, occupational health and safety, and social issues. Its operations are generally well organized and managed. The existing environmental, occupational health and safety and labour practices are mostly compliant with the applicable Romanian laws and regulations.

The due diligence undertaken to date by the external consultants in connection with the Feasibility Study has reviewed environmental issues associated with the Company's selected investment components. It confirmed that PIP measures are designed to address some of the most urgent environmental, occupational and public health and safety concerns revealed during due diligence. The PIP has been structured to meet Romanian and EU environmental standards, and adequate mitigation measures will be incorporated in the project design and into the resulting Environmental and Social Action Plan (ESAP).

The PIP will involve construction of the new sewerage network pipes and new water supply network pipes, as well as rehabilitation of the pumps for the pumping system to ensure sufficient pressure to supply water in the network extension. This extension will allow for connecting previously unserved towns and communes in the vicinity of Pitesti City to the already existing main water supply and sewerage networks. The environmental investigations showed that the project would result in significant environmental, health and safety improvements, and that any adverse environmental impacts would be limited. Implementation of the PIP will provide a number of benefits including improved water supply and wastewater collection services for the areas with poor sanitation. The project will benefit the municipalities by providing them with drinking water according to Romanian and EU standards and by improving standards of wastewater collection, thus reducing pollution to Arges River and further Danube River. The full design and alignment of the proposed new networks is not available at this stage, however most of the network extension will follow the existing infrastructure such as roads, thus minimising any potential environmental and social adverse impacts. Any land needed for the purpose of the project, including land for the pumping stations and water storage tanks, will be acquired on voluntary agreement or in compliance with the EBRD’s Environmental Policy requirements relating to involuntary resettlement and economic displacement.

The construction-related impacts are likely to be localised, short term in nature and they will be efficiently prevented or mitigated by applying international construction practice and planning. However, these impacts will need to be properly managed during the construction phase by the contractor. The mitigation measures identified during the due diligence will be incorporated into an ESAP. This plan will be agreed with the Company for implementation during this project, and it will guide the Company towards meeting the applicable Romanian and EU environmental standards.

5. Summary of mitigation measures

A comprehensive Environmental and Social Action Plan (ESAP) is being developed to help the Company implement the Project in the environmentally sound and sustainable manner. The ESAP will include measures for managing and mitigating the impacts of the construction activities and operation stage of the Project. The ESAP will be structured to guide the Company towards meeting the applicable Romanian and EU environmental, health and safety standards.

6. Disclosure of Information and Consultation

Environmental information on the project will be disclosed to public in accordance with the planning and construction procedures of Romanian law. In the context of EBRD’s participation in the project, this environmental summary will be disclosed locally at S.C. APA CANAL 2000 S.A. Pitesti and the Municipality offices, on their website and in local media as well as in English on EBRD website at www.ebrd.com

7. Monitoring and Reporting

S.C. APA CANAL 2000 S.A. Pitesti will report to the EBRD annually on the measured environmental impacts and on the implementation of the ESAP. The Bank will evaluate the project's compliance with the applicable environmental and social standards during the lifetime of the project by reviewing these reports and by conducting monitoring visits to the project when and if deemed appropriate.

Technical
cooperation:

• Arges Regional Water Project Preparation – EUR 463,976 (EUR 300,000 financed by the Government of the Netherlands and EUR 163,976 client contribution).
• Arges Regional Water Financial and Operational Performance Improvement Programme – EUR 300,000 – donor to be identified.

For consultant opportunities for projects financed by technical cooperation funds, visit procurement of consultants.

EBRD contact:

Susan Goeransson, Operation Leader: goeranss@ebrd.com

Procurement or tendering
opportunities:

Visit EBRD Procurement
Enquiries: Tel: +44 20 7338 6794; Fax: +44 20 7338 7472, Email: procurement@ebrd.com

General enquiries:

EBRD project enquiries not related to procurement:
Tel: +44 20 7338 7168; Fax: +44 20 7338 7380
Email: projectenquiries@ebrd.com