Project description
and objectives:

The proposed project involves a loan to the Municipal Water Company of the City of Zhytomyr, a municipal enterprise, wholly owned by the City of Zhytomyr in Ukraine. The loan will finance priority capital expenditures aimed at reducing water losses, energy consumption and improvement of treatment quality. The investments are likely to include replacement of pipes and pumps, leakage detection equipment, rehabilitation of water treatment facilities, water meters, and waste water sludge processing.

Transition impact:

The proposed project will have an impact on the transition process through:

(i) implementation of market-based tariff structure aimed at full cost recover through tariffs which will lead to long term financial sustainability of the water sector in the City;

(ii) billing according to actual consumption, motivating end-users to economize natural resources;

(iii) transfer of skills during the implementation phase including the procurement, design, installation and contracts supervision in accordance to the best available international engineering practice.

(iv) Demonstration effect of the efficient institutional set up of a municipal utility with Service Agreement and robust Tariff Setting Methodology.

The client:

The borrower is the Water Company of the City of Zhytomyr. The City of Zhytomyr acts as guarantor.

EBRD finance:

Senior loan of EUR 10 million to the Company.

Total project cost:

EUR 12.6 million.

Environmental impact:

The rehabilitation and modernisation of existing water and waste water infrastructure is associated with limited environmental impacts; therefore, the project was screened B/1. An environmental audit and analysis as well as an environmental management plan (EMP) will be prepared as part of the project feasibility study. The project will result in substantial environmental benefits, including significant energy efficiency improvements as follows:

• The decreased water losses and reduced energy consumption for pumping with rational prioritisation of further upgrades and renovations of the water system will reduce electricity consumption and associated emissions at power plants.
  
  
• The change towards a demand-driven business strategy, implementation of water-conserving incentives for the end-user will reduce amount of water used to provide water and waste water services in the City.
  
  
• The Bank will explore with the Client the possibility for Carbon Finance through Multilateral Carbon Credit Fund, together with the District Heating Project developed with another municipal utility company.
  
  
• The implementation of the proposed EMP for bringing the Company’s operations into compliance with Ukrainian and EU standards will be covenanted in the Loan and Guarantee Agreements. The Company will disclose locally a summary of the Project and the associated environmental issues, in accordance with the provisions for public information for the Bank’s “B” category projects.

Technical
cooperation:

• Feasibility Study. To be financed by the Government of Austria.
• IFRS Audit. To be financed by the Bank from its own resources.
• Implementation and Corporate Development Support Programme for the Company. Funding to be identified.

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

EBRD contact:

Grzegorz Gajda, Operation Leader: gajdag@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