BRNO WASTEWATER TREATMENT PROJECT

The project will finance the upgrade of the sludge treatment process within the wastewater treatment plant in Modrice, which serves Brno, the second largest city in the Czech Republic.

The aim is to address the insufficient capacity of the sludge treatment process and improve the net energy balance of the wastewater treatment plant. The planned improvements will also ensure compliance with the recent stricter regulatory limits in the field of sanitary sludge disposal by providing higher standard treatment solution, which allows for more versatile and safer disposal options.

The project comprises an investment in a new sludge treatment facility in Modrice, about 10 km south of Brno, the second largest city of the Czech Republic. The new facility is proposed to ensure compliance with European and Czech environmental standards and improve energy efficiency. The promoter has a strong focus on climate change considerations, which underpin the rationale of the proposed investments. Sludge treatment projects furthermore generate positive externalities, including avoided public health costs, environmental benefits of improved treated effluent quality, reduced greenhouse gas emissions, as well as benefits from enabling socio-economic developments, including society-wide benefits from being better able to mitigate the adverse impacts of climate change. Overall, these environmental, climate and social benefits would not be achieved to the same extent without public intervention. The Bank is able to provide long-term financing, aligning maturities, repayment and drawdown conditions to the characteristics of the investments. Furthermore, the capital-intensive nature of the Borrower's operations requires participation of other financing parties and EIB's involvement can have crowding-in impact in this respect as well.

The project will contribute to ensuring compliance with key EU directives in the water sector, notably the Urban Waste Water Treatment Directive (91/271/EEC), the Sewage Sludge Directive (86/278/EEC) and the Water Framework Directive 2000/60/EC. Where and if applicable, the requirements of the environmental impact assessment (EIA) Directive 2014/52/EU (amending the EIA Directive 2011/92/EU) and the Strategic Environmental Assessment (SEA) Directive 2001/42/EC will be respected. The promoter will in such case, prior to utilising any EIB funds, be responsible for transmitting the EIA to teh EIB for web publication. For any part of the project that may have an impact on a nature conservation site, the promoter will be required to provide the EIB with information on the mitigating measures required to comply with the Habitats and Birds Directives (92/43/EEC and 2009/147/EC respectively).

The promoter has to ensure that contracts for implementation of the project have been and will be tendered in accordance with the applicable EU procurement legislation, Directive 2014/25/EU as well as Directive 92/13/EEC, as interpreted by the Court of Justice of the EU, with publication of tender notices in the EU Official Journal, as and where required.