KLAIPEDA WATER AND SANITATION

Promoter – Financial Intermediary

AB KLAIPEDOS VANDUO

Location

• Lithuania

Description

The project will co-finance part of the 2023-2026 investment programme of Klaipedos Vanduo, the third largest water company in Lithuania. The investments mainly consist of the extension and rehabilitation of water supply, stormwater and wastewater collection and treatment facilities.

Additionality and Impact

The Project concerns the 2023-2026 investment programme in water supply, wastewater and stormwater collection and treatment of Klaipeda Vanduo, the third largest water company of Lithuania. The operational area of Klaipeda Vanduo covers Klaipeda Municipality and Klaipeda District Municipality in Klaipeda County (an EIB Cohesion Area) with around 185,000 customers. The programme consists of the construction and rehabilitation of water supply, stormwater and sewer networks, the extension, rehabilitation and modernisation of wastewater and stormwater treatment plants, water treatment, storage facilities and office buildings, the purchase of water meters, operation and maintenance equipment and machinery as well as ICT process improvement and automation items. The Project aims to improve the reliability and affordability of the water supply service and wastewater management services, thereby enhancing the quality of life of the population in the service area. The investments are also expected to increase the generation of renewable energy and energy efficiency. The Project will contribute to mitigating market failures in the water sector by financing infrastructure, which generates positive environmental, public health and climate externalities that are not fully reflected in the applicable water tariffs in Lithuania.

EIB financing, with its long maturity and flexible conditions, will help the Borrower to diversify its funding sources and will facilitate the full financing and implementation of the Project.

Objectives

This project will improve access to water and sanitation services in Klaipeda Vanduo's area of operation, as well as the reliability and affordability of the water supply service and wastewater management services, thereby enhancing the quality of life of the population in the service area. It is estimated that the loan will be used for the construction and rehabilitation of water supply, stormwater and sewer networks, the extension, rehabilitation and modernisation of wastewater treatment plants, water treatment and storage facilities, the purchase of water meters and equipment and ICT process improvement and automation items. The exact scope will be determined during the appraisal.

Sector(s)

• Water, sewerage - Water supply; sewerage, waste management and remediation activities

Proposed EIB finance (Approximate amount)

EUR 25 million

Total cost (Approximate amount)

EUR 51 million

Environmental aspects

The Promoter will be required to implement and operate the investments in conformity with national laws, as well as the EIB's environmental and social standards. The project will contribute to ensure compliance with key EU directives in the water sector, notably the Urban Waste Water Treatment Directive (91/271/EEC) and the Water Framework Directive (2000/60/EC). The project is expected to contribute to climate action and environmental sustainability (CA&ES) objectives, in particular to climate mitigation, climate adaptation and pollution prevention and control, among others through the reduction in emissions due to wastewater treatment and by pollution reduction in water bodies. Most of the components to be financed under the investment loan are expected to have limited environmental and social impacts. However, some of the investments may fall under Annex II of the EIA Directive 2011/92/EU as amended by Directive 2014/52/EU, requiring the competent authorities to determine whether an environmental impact assessment (EIA) is required. Where a formal EIA is required, a copy of the Environmental & Social Impact Study or the Non-Technical Summary (NTS) or equivalent document will be provided to the Bank, and published on its website. The Promoter will also be required to verify that all of the schemes submitted for financing by the Bank follow the Birds Directive 2009/147/EC and Habitats Directive 92/43/EEC. For any part of the project that may impact on a nature conservation site, the promoter will be required to provide to the Bank information on the mitigating measures required to comply with the Habitats and Birds Directives. The Promoter's capacity to ensure that the schemes are in compliance with the EIB's environmental and social standards will be verified at appraisal.

Procurement

The Bank will require the Promoter to ensure that implementation of the project will be done in accordance with the Bank's Guide to Procurement.

Status

Signed - 16/11/2023