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R2CF Galati sub-project

2012-01-30 00:00:00

Country:	Romania
Project number:	42928
Business sector:	Municipal and environmental infrastructure
Public/Private:	Public

Environmental category:	B
Board date:	27 Mar 2012
Status:	Passed concept review, Pending final review
PSD disclosed:	9 Dec 2011

Project Description

The EBRD is considering providing a local currency loan of up to RON 55.5 million (EUR 13.2 million equivalent) to SC Apa Canal SA Galati for water and wastewater infrastructure improvements. The financing is a sub-project of the EUR 200 million Framework for Romania EU Cohesion Fund Co-Financing for regionalised water companies (the “Framework”). The project summary document for the Framework was published on 23 September 2010.

The proposed project, which is part of a EUR 129.8 million regional investment programme co-financed by significant grant funding from the European Union, the Government of Romania and the local governments under Romania’s Cohesion Fund Programme, will enable the Company to extend and rehabilitate its network in the County of Galati as well as to improve water and wastewater services in five main localities in the County, namely: Galati city, Tecuci, Targu Bujor, Pechea and Liesti. Investments are expected to significantly reduce water losses, optimise operating costs and expand water supply and wastewater collection and treatment services in Galati County in line with relevant EU directives.

The EUR 13.2 million equivalent loan project is a sub-project of the EUR 200 million R2CF Framework (Project ID 41666) approved by the Bank to co-finance projects in Romania’s water and wastewater sector alongside EU Cohesion Funds.

Transition Impact

The sub-project will support environmental improvements and continued regionalisation of water and wastewater services in Galati 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. The Company will participate in a benchmarking programme alongside other borrowers under the Framework, which was approved by the Bank to co-finance projects in Romania’s water and wastewater sector alongside EU Cohesion Funds.

The Client

SC Apa Canal SA Galati, a regional operating company providing water and wastewater services in the County of Galati as well as to the capital City of Galati.

EBRD Finance

A local currency loan up to RON 55.5 million (EUR 13.2 million equivalent) for Galati Sub-Project.

Project Cost

Up to RON 545.8 million (EUR 129.8 million equivalent) for Galati Sub-Project.

Environmental Impact

The Project has been categorised B in accordance with the EBRD’s 2008 Environmental and Social Policy. The potential E&S impacts associated with the project components are likely to be site-specific and can be readily identified and addressed through adequate mitigation measures.

The project addresses the first phase of investments (priorities) outlined in the Galati County Plan for the development of the water sector, and it is expected to bring improved water and sewerage services to the local population, increase the connection rates to the water supply and the sewerage collection networks, and to improve the efficiency and the quality of wastewater treatment. The project is designed to meet compliance with the EU Drinking Water Directive and Urban Wastewater Directive in the project area.

The due diligence is currently on-going. It includes an E&S review of the Company's existing facilities, operations and management systems to assess the past and current performance, and a gap E&S analysis of the project appraisal documents for the project prepared for the EU Cohesion Fund application to assess compliance with EBRD's Performance Requirements (PRs). An Environmental and Social Action Plan (ESAP) will be prepared and agreed with the Company to address any environmental and social issues identified during the due diligence to achieve and maintain compliance with the Bank's PRs within a reasonable time-frame. The Company will also develop a Stakeholder Engagement Plan, including a grievance mechanism.

This PSD will be updated after the due diligence.

Technical Cooperation

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 (EUR 125,100 - financed by Spain), institutional and financial due diligence (EUR 74,800 - financed from the EBRD’s own resources) as well as a benchmarking and FOPIP programme (EUR 750,000 - financed by the EBRD’s Shareholder Special Fund).

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

Public Information Policy (PIP)

The PIP sets out how the EBRD discloses information and consults with its stakeholders so as to promote better awareness and understanding of its strategies, policies and operations.
Text of the PIP

Project Complaint Mechanism (PCM)

The EBRD has established the Project Complaint Mechanism (PCM) to provide an opportunity for an independent review of complaints from one or more individuals or from organisations concerning projects financed by the Bank which are alleged to have caused, or likely to cause, harm. The Rules of Procedure governing the PCM can be found at www.ebrd.com/downloads/integrity/pcmrules.pdf, the Russian version can be accessed at http://www.ebrd.com/downloads/integrity/pcmrulesr.pdf

Any complaint under the PCM must be filed no later than 12 months after the last distribution of EBRD funds. You may contact the PCM officer (at pcm@ebrd.com) or the relevant EBRD Resident Office for assistance if you are uncertain as to the period within which a complaint must be filed.

Project Summary Documents are created before consideration by the EBRD Board of Directors. Details of a project may change following disclosure of a Project Summary Document. Project Summary Documents cannot be considered to represent official EBRD policy.

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