EuropeAid Water Investment Support Facility

WISF-01: Environmental / Social Preparation Study for ADB Djizzak & Surhandarya Water Supply & Sanitation Project

WISF-03: Environmental / Social Preparation Study for World Bank Ferghana Valley Water Resources Management Project

Press ConferenceTashkent20 July 2007

WISF Team Leader: George McDonnell george.mcdonnell@arcadis-euroconsult.com

Encouraging Environmental Investment • International Financial Institutions like ADB and

the World Bank have a long history of financing water related projects:

– IFIs use toughest project evaluation methods available

– IFIs can therefore provide good examples of large scale effective water projects

– Project preparation is the key to IFI investment decisions

The IFI Decision Process 1

Initial analysis of all suggestions:• Analyse need• Analyse potential impact• Analyse capacities• Initial financial projection

Project B

Project A

Project C

Project D

……..

Project E

Project F

Project Z

Demand for projects

IFIs (ADB, World Bank)

JEP Project Pipeline: Environmental Projects & Energy and Infrastructure Projects with Environmental Components in the NIS and Mongolia FY 2000 -2003

Country Project Name

Total $m

IBRD / IDA $m

GEF $m

Potential JEP StudyEarliest

Start Date

DeadlineStudy Status

I P PA

AM Environmental Sector Investment 57847 2001 ECSSD Damianova 17.0 10.0 02/15/01 Alt. Income Study or EA sept-00 févr-00 2 sept-00AM Nat. Res. Mgmt. & Poverty Red. 69917 2001 ECSSD-GEF Damianova 5.0 0.0 5.0 1AM Geothermal Energy 60806 2001 ECSSD-GEF Halldin 6.3 0.0 6.3 08/24/01 1AM Irrigation Development 55022 2002 ECSSD Lundell 60.0 20.0 07/19/01 Drainage Study 2 juin-00AM Municipal Water and Wastewater 63398 2003 ECSIN Smith 35.0 31.0 07/03/02 1AZ Irrigation / Drainage Rehab. 8284 2001 ECSSD Stoutjesdijk 46.8 40.0 06/22/00 1AZ Envir. Investment & Management 66199 2002 ECSSD Von Ritter ? 6.8 09/04/01 1AZ Irrigation II 8286 2002 ECSSD T. Konishi 61.6 61.6 09/03/01 1BY Urban Water 35788 2002 ECSIN N. Kishore 45.0 20.0 1BY Social Energy Efficiency 44748 2001 ECSIN E. Peterson 24.0 20.0 1GE Forestry 44800 2002 ECSSD Kushlin 20.5 15.0 07/31/01 PAD Advisor or Econ. & Fin. Anal. août-00 janv-00 2 oct-00GE Irrigation & Drainage Rehab.. 55068 2002 ECSSD Shuker 25.0 25.0 01/19/01 1GE Protected Areas Development 48791 2001 ECSSD-GEF Brylski 11.1 0.0 11.1 08/17/00 1GE Geothermal 70274 2002 ECSSD-GEF Halldin 20.0 15.0 5.0 12/04/02 Reconnaissance Study juin-00 2KZ Envir. Mgmt. and Rehab.. 59803 2002 ECSSD Krzyzanowski 52.0 41.6 07/16/01 Social Assessment mai-00 3 mai-00KZ Syr Darya 46045 2001 ECSSD Ahmad 100.0 50.0 02/19/01 Fisheries Study mai-00 3 mai-00KZ Agri.. Post Privatization # 2 APL 58015 2001 ECSSD Southworth 50.0 35.0 03/24/01 1KZ Wind Energy 65624 2001 ECSEG-GEF H. Schreiber 5.0 0.0 1.5 06/19/01 1KZ Small Hydropower 65625 2001 ECSEG H. Schreiber 60.0 0.0 05/08/01 1KZ Agri.. Support Services 49721 2003 ECSSD Cook 40.0 40.0 04/10/03 1KG Rural Water Supply and Sanitation 36977 2001 ECSIN M. Konishi 23.6 20.0 12/14/00 1KG Livestock/Pasture Mgmt. 49724 2003 ECSSD G. Schreiber 25.0 15.0 07/09/02 1MD Environment MSP new 2000 ECSSD 1MD Biofuel 66074 2002 ECSEG-GEF Vucetic 5.0 0.0 5.0 07/17/01 1MD Dniestr Watershed Management new 2000 ECSSD Brylski 1MD Biodiversity Conservation new ECSSD-GEF Brylski 1MD Energy 2 40558 2001 ECSEG Vucetic 20.0 15.0 02/22/01 1MN Energy Sector 40907 2002 EASEG Taylor 35.0 30.0 03/07/01 1MN Sust. Livelihoods 67770 2001 EASRD Mearns 20.0 20.0 03/30/01 1RU Environmental Investment 50539 2003 ECSSD von Ritter 200.0 200.0 03/04/03 1RU Municipal Services 50485 2006 ECSIN Lawrence 300.0 300.0 06/24/06 1TJ Agric. Technology and Environment 57811 2001 ECSSD Janakiram 5.0 5.0 06/26/01 1TM Irrigation 8866 2001 ECSSD Stoutjesdijk 40.0 40.0 05/15/01 1UA Donetsk Environment 43880 2002 ECSSD Damianova 25.0 20.0 03/08/01 1UA Biodiversity Conservation 48790 2001 ECSSD-GEF Brylski 8.0 0.0 8.0 09/19/00 1UA Coal Bed Methane 9105 2002 ECSEG-GEF Hendriks 15.0 0.0 15.0 1UZ Drainage 9127 2001 ECSSD Lundell 105.0 70.0 12/13/01 EA juil-00 juin-00 2 juin-00 janv-00UZ Bukhara/Samarkand Water Supply 49621 2001 ECSIN Gomez 33.8 31.5 01/30/01 1R Clean Air Initiative 2001 ECSSD H. Schreiber 1R Caspian Program ECSSD Evans 1R Black Sea Program ECSIN Marino 1

Legend(a) JEP Study Status: 1 = Potential Study; 2 = Study Request (formal / informal); 3 = Study Implementation; 4 - Study completed(b) Missions: I = Identification; P = Preparation; PA = Pre-Appraisal; A = Appraisal

WB Missions WB

Project #

Project Finance JEP StudyWB Board

Approval Date

WB Task Team Leader

(TTL)

WB Loan

FYWB Sector

List of potential projects

For example projects that help implement a Country Assistance Strategy (CAS)

IFIofficia

l

The IFI Decision Process 2

IFI Project Decision Document (e.g. PAD)

IFIofficia

l

Which potential projects deserve support ?

Project Preparation

Studies

IFIBoard

Decision-making body approves or rejects loan

Problem:who pays?

IFI Project Preparation Study

• An IFI loan requires a very detailed project preparation study covering financial, technical, environmental, social and other aspects

• Therefore professional preparation studies are needed to explore the issues affecting the potential impact of a project

• These studies are expensive, but essential

The Problem• Project preparation studies cost

a lot – IFIs can’t always finance them– They cannot normally be financed

through loans

A Solution

• EuropeAid can fund some of these studies

Project Preparation Studies…

Who pays?

Why EuropeAid Project Preparation Studies?

• EuropeAid resources are too small to finance large environmental investments in the CIS, but EuropeAid can support project preparation studies

• EuropeAid has done this before – lots of experience with EBRD and European Investment Bank

Water Investment Support Facility Summary

• WISF is helping IFIs such as ADB and World Bank prepare seven EU Water Initiative related water projects in Uzbekistan and the Caucasus

• WISF is helping prepare IFI water projects with a total budget of approx. EUR 340m

WISF Project Management

In June 2005 EuropeAid signed the WISF contract with Euroconsult Mott MacDonald (NL) in cooperation with:

– BCEOM (FR) – Mazars and Guerard (FR)

WISF Background

• WISF was developed by EuropeAid in collaboration with IFIs

• WISF is the most recent EuropeAid project preparation facility (others: Joint Environment Programme, Black Sea Investment Facility etc)

WISF Background contd.

• Banks want to develop Water Supply and Sanitation and Integrated Water Resource Management

• However, the banks need project preparation support

• WISF = one source of project preparation support

• WISF is carrying out eight project preparation studies for seven IFI projects in Uzbekistan and the Caucasus

WISF Facts & Figures

• The eight studies are for Asian Development Bank, EBRD and World Bank projects– Armenia (1) (EBRD) (completed)– Azerbaijan (2) (World Bank) (one completed)– Georgia (3) (EBRD) (completed)– Uzbekistan (2) (ADB & World Bank) (ongoing)

• WISF Budget: EUR 2.7m

• WISF Duration: July 2005 – December 2007

The WISF process

JEP Project Pipeline: Environmental Projects & Energy and Infrastructure Projects with Environmental Components in the NIS and Mongolia FY 2000 -2003

Country Project Name

Total $m

IBRD / IDA $m

GEF $m

Potential JEP StudyEarliest

Start Date

DeadlineStudy Status

I P PA

AM Environmental Sector Investment 57847 2001 ECSSD Damianova 17.0 10.0 02/15/01 Alt. Income Study or EA sept-00 févr-00 2 sept-00AM Nat. Res. Mgmt. & Poverty Red. 69917 2001 ECSSD-GEF Damianova 5.0 0.0 5.0 1AM Geothermal Energy 60806 2001 ECSSD-GEF Halldin 6.3 0.0 6.3 08/24/01 1AM Irrigation Development 55022 2002 ECSSD Lundell 60.0 20.0 07/19/01 Drainage Study 2 juin-00AM Municipal Water and Wastewater 63398 2003 ECSIN Smith 35.0 31.0 07/03/02 1AZ Irrigation / Drainage Rehab. 8284 2001 ECSSD Stoutjesdijk 46.8 40.0 06/22/00 1AZ Envir. Investment & Management 66199 2002 ECSSD Von Ritter ? 6.8 09/04/01 1AZ Irrigation II 8286 2002 ECSSD T. Konishi 61.6 61.6 09/03/01 1BY Urban Water 35788 2002 ECSIN N. Kishore 45.0 20.0 1BY Social Energy Efficiency 44748 2001 ECSIN E. Peterson 24.0 20.0 1GE Forestry 44800 2002 ECSSD Kushlin 20.5 15.0 07/31/01 PAD Advisor or Econ. & Fin. Anal. août-00 janv-00 2 oct-00GE Irrigation & Drainage Rehab.. 55068 2002 ECSSD Shuker 25.0 25.0 01/19/01 1GE Protected Areas Development 48791 2001 ECSSD-GEF Brylski 11.1 0.0 11.1 08/17/00 1GE Geothermal 70274 2002 ECSSD-GEF Halldin 20.0 15.0 5.0 12/04/02 Reconnaissance Study juin-00 2KZ Envir. Mgmt. and Rehab.. 59803 2002 ECSSD Krzyzanowski 52.0 41.6 07/16/01 Social Assessment mai-00 3 mai-00KZ Syr Darya 46045 2001 ECSSD Ahmad 100.0 50.0 02/19/01 Fisheries Study mai-00 3 mai-00KZ Agri.. Post Privatization # 2 APL 58015 2001 ECSSD Southworth 50.0 35.0 03/24/01 1KZ Wind Energy 65624 2001 ECSEG-GEF H. Schreiber 5.0 0.0 1.5 06/19/01 1KZ Small Hydropower 65625 2001 ECSEG H. Schreiber 60.0 0.0 05/08/01 1KZ Agri.. Support Services 49721 2003 ECSSD Cook 40.0 40.0 04/10/03 1KG Rural Water Supply and Sanitation 36977 2001 ECSIN M. Konishi 23.6 20.0 12/14/00 1KG Livestock/Pasture Mgmt. 49724 2003 ECSSD G. Schreiber 25.0 15.0 07/09/02 1MD Environment MSP new 2000 ECSSD 1MD Biofuel 66074 2002 ECSEG-GEF Vucetic 5.0 0.0 5.0 07/17/01 1MD Dniestr Watershed Management new 2000 ECSSD Brylski 1MD Biodiversity Conservation new ECSSD-GEF Brylski 1MD Energy 2 40558 2001 ECSEG Vucetic 20.0 15.0 02/22/01 1MN Energy Sector 40907 2002 EASEG Taylor 35.0 30.0 03/07/01 1MN Sust. Livelihoods 67770 2001 EASRD Mearns 20.0 20.0 03/30/01 1RU Environmental Investment 50539 2003 ECSSD von Ritter 200.0 200.0 03/04/03 1RU Municipal Services 50485 2006 ECSIN Lawrence 300.0 300.0 06/24/06 1TJ Agric. Technology and Environment 57811 2001 ECSSD Janakiram 5.0 5.0 06/26/01 1TM Irrigation 8866 2001 ECSSD Stoutjesdijk 40.0 40.0 05/15/01 1UA Donetsk Environment 43880 2002 ECSSD Damianova 25.0 20.0 03/08/01 1UA Biodiversity Conservation 48790 2001 ECSSD-GEF Brylski 8.0 0.0 8.0 09/19/00 1UA Coal Bed Methane 9105 2002 ECSEG-GEF Hendriks 15.0 0.0 15.0 1UZ Drainage 9127 2001 ECSSD Lundell 105.0 70.0 12/13/01 EA juil-00 juin-00 2 juin-00 janv-00UZ Bukhara/Samarkand Water Supply 49621 2001 ECSIN Gomez 33.8 31.5 01/30/01 1R Clean Air Initiative 2001 ECSSD H. Schreiber 1R Caspian Program ECSSD Evans 1R Black Sea Program ECSIN Marino 1

Legend(a) JEP Study Status: 1 = Potential Study; 2 = Study Request (formal / informal); 3 = Study Implementation; 4 - Study completed(b) Missions: I = Identification; P = Preparation; PA = Pre-Appraisal; A = Appraisal

WB Missions WB

Project #

Project Finance JEP StudyWB Board

Approval Date

WB Task Team Leader

(TTL)

WB Loan FY

WB Sector

Project pipeline

SteeringCommitte

e

WISF Team Leader

EuropeAid Project Manager

ADB / World Bank

Manager

• Will the project help the EU Water Initiative?

• Is the project in the country strategy?

• Is it realistic?• Can WISF afford it?

Project B

Project A

Project C

Project D

……..

Project E

Project F

Project Z

Demand for projects

WISF in Uzbekistan

WISF is carrying out two project preparation studies in Uzbekistan

• WISF-01: Environmental and Social Study for Djizzak & Surhandarya Water Supply & Sanitation Sector Project (ADB) (ongoing)

• WISF-03: Environmental and Social Assessment for Ferghana Valley Water Resources Management Project (Phase I) (World Bank) (ongoing)

ADB Project• Project: Djizzak & Surhandarya Water Supply

& Sanitation

• Project Results:– Improved water supply and sanitation in

Djizzak and Surhandarya rayon centres and nearby rural settlements

• Total Project Cost: USD 31m

ADB Project Preparation Process

• Three project preparation components:

1. Overall Project Preparation – David King2. Project Feasibility Study – IKS Consulting

(UZ)3. Environmental and Social Components of the

project will be carried out under the WISF-01 study

WISF-01 Data

• WISF-01 runs from March to July 2007• WISF-01 components:

– Task 1: Environmental Assessment– Task 2: Poverty and Social Assessment– Task 3: Social Safeguards

• WISF-01 Study Manager: Wandert Benthem

WISF-01 RESULTS (1)

• Environmental Impacts of ADB Project

– Little or no environmental impacts– Increased demand from ground water

resources– Increased waste water volumes

WISF-01 RESULTS (2)

• Social Impacts of ADB Project

– Project will not result in resettlement – Minor social impacts in two sub-projects – No social impacts in the remaining 10 sub-

projects – Improved health– Expected increase of economic activities and

standard of living

World Bank Project

• Project: Ferghana Valley Water Resources Management Project Phase 1

• Project Results: improved water productivity and water resources management in three Ferghana Oblast tumans (Rishtan, Baghdad and Altyrayk)

• Total Project Cost: approximately USD 50m

World Bank Project Preparation Process

• Two project preparation components:

– Technical feasibility study - Mott MacDonald & Temelsu (Study Manager – Bob Davey)

– Environmental and Social Assessment – this will be carried out under the WISF-03 study

WISF-03

• WISF-03 runs from May to November 2007

• WISF-03 components:– Task 1: Environmental Assessment– Task 2: Social Assessment

• WISF-03 Study Manager: Wandert Benthem

WISF-03 – PRELIMINARY RESULTS

• Project intervention options currently being formulated

• Environmental survey has started

• Social survey has started

Conclusions

• WISF is a EuropeAid tool to help banks prepare water projects in the Caucasus and Uzbekistan

• WISF is a “good gamble” by EuropeAid whereby a relatively small facility is helping to mobilise two water projects in Uzbekistan (ADB and World Bank) with a combined total budget of USD 81m

• WISF will run until December 2007