COUNTRY | Serbia
REGION | Asia
SECTOR | water and waste
QII Principles | Principle 1 Sustainable Growth & Development, Principle 2 Economic Efficiency, Principle 3 Environmental Considerations, Principle 4 Building Resilience, Principle 6 Infrastructure Governance
QII Sub-Principles | 1: SDGs, 2: Value for money analysis, 2: Life-cycle costing, 2: Technological innovation, 3: Environmental Impact Mitigation, 3: Disclosure of environmental aspects, 3: Ecosystems, 3: Biodiversity, 3: Climate, 3: Emissions, 4: Resilience, 5: Social Impact Assessment, 6: Procurement transparency, 6: Legal and Regulatory Frameworks, 6: Institutional Framework of infrastructure investment, 6: Enabling Environment
Overview
Cost: Total project cost is €370 million. The EBRD is contributing a €128.25 million syndicated loan, including a loan of €72.25 million for its own account, a loan of €35 million provided by Erste Group Bank AG under the A/B loan structure, and €21 million in concessional finance funded by Green Energy Special Fund. The EBRD financing is part of a wider package including the International Finance Corporation (IFC) and the Austrian development bank Oesterreichische Entwicklungsbank (OeEB) with loans of up to €72.25 million and €35 million, respectively.
Size: 103 MW Energy from Waste facility with a capacity of 340 kilo tonnes per annum, Construction and Demolition Waste recycling facility with a capacity of 210 kilo tonnes per annum, new landfill with a capacity of 170 kilo tonnes per annum and remediation of the existing non-sanitary landfill.
Parties: Beo ?ista Energija Ltd., a special purpose vehicle formed by the global utility company Suez, the Japanese conglomerate Itochu and Marguerite Fund II, a pan-European equity fund investing in renewables, energy and transport, won the tender and entered a 25-year PPP agreement with the city of Belgrade in 2017.
Context: A city of 1.7 million like Belgrade generates a lot of waste. Opened in 1970, the landfill in Vin?a, a suburb in the east of Serbia’s capital, has been receiving an average of 2,700 tons of garbage every day, servicing 13 out of Belgrade’s 17 municipalities. Vin?a is one of the largest non-sanitary landfills in Europe. 50 years on, the facility is not only approaching maximum capacity but also poses a major environmental and health risk, including the pollution of the nearby river Danube.
Timeline
Procurement (Mar 18), Financial close (Sept 19), Construction (Oct 19 ? Jun 22)
Relevance to QII
Given that the previous non-sanitary landfill posed a major environmental and health risk to the region, the project has a significant positive impact on the environment and local community. This project and its innovative technology will minimize impact on the environment and provide energy from waste in accordance with EU standards & Best Available Techniques, with at least 7 contributions to UN SDGs.
The project will contribute to Serbia meeting targets in waste management and environmental protection in the context of EU accession negotiations. All facilities developed under the project will be compliant with applicable EU regulations (namely the Landfill Directive and the Industrial Emissions Directive). It will also contribute to the scaling up of sustainable energy solutions for Belgrade thanks to the electricity and the heat generated by the project.
In addition, the project required preparation and implementation of Environmental and Social Action Plan, Resettlement Action Plan, Livelihood Restoration Plan and Stakeholder Engagement Plan in line with the best international practice.
The PPP has proved to achieve value for money in constructing the project according to a study commissioned by the city. Given the PPP and the participation by a number of multinational firms in the transaction, the project strengthens the legal and institutional framework within Serbia, and encourages further foreign direct investment in the country.
Benefits
The project addresses one of the most urgent environmental challenges in Europe. The unsanitary landfill, which was constructed without a lining, gas collection or leachate treatment, will be rehabilitated. New waste management system will prevent further air pollution and danger to the groundwater, currently threatening the nearby Danube basin. The new facilities will meet the biodegradable waste landfill diversion as well as the construction and demolition waste recovery objectives set by the EU Waste Framework Directive.
Metrics
Implementation and performance success is measured by the project being completed on-time and within budget, and cash flows being in line with projections. Also, from a green perspective, the amount of material recycled, CO2 emissions reduced and renewable electricity produced is monitored.
Name of Institution
European Bank for Reconstruction and Development
Website URL