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    KYZYLORDA WATER SUPPLY SYSTEM MODERNIZATION

          Kyzylorda (the “City”), with a population of over 250,000 inhabitants, has 541 km of water supply network that includes water mains, district distributions and yard distributions. About 69 per cent of the City’s population is connected to the centralized water supply system. The network’s average depreciation ratio is currently about 70 per cent. This is a major factor causing a high level of technical losses of over 27 per cent based on the estimates made according to national standards. In general, the current water supply system is characterised by the low efficiency of the pumping equipment, overflowing of wells, high power consumption and frequent leakages in the transmission and distribution network.

          The sewerage network of 308 km is connected to a wastewater treatment plant (WWTP) with a daily capacity of 70,000 m3. Unlike the water supply network, it covers only about 53 per cent of the City’s population, as a significant number of private residential houses are not connected. At present, only up to 43 per cent of the nominal capacity of the WWTP is utilised. The sewerage system is characterised by heavy power consumption, inefficient pumping equipment, absence of metering and a lack of pre-treatment facilities at industrial facilities. No major investments have been made in the system over the last decades, which results in high clogging rates, network failures and inadequate wastewater treatment (4 breakdowns per km of the network in 2013), hence posing a risk to the environment and the population.

          In December 2014, European Bank for Reconstruction and Development (“EBRD”) and the Company entered into a loan agreement to finance the rehabilitation and upgrade of the water supply and wastewater management system (the “Project”) in the city of Kyzylorda (the “City”). The project is supported by the City and Oblast Akimats.

        In parallel with the hard investments, the Project will contribute to the development and institutional strengthening of the Company with respect to procurement, corporatisation, credit worthiness enhancement, and an improvement of the environmental situation in the City.

          The aim of  technical assistance assignment of Corporate Solutions (UK) and BDC Consulting KZ is to support the Company, and later the private management company (the Manager – to be selected during the Project implementation period), operating under the terms of a Public Service Management Contract (PSMC) to improve the Company’s commercial standing, service and environmental, and social performance.

          Besides,  the objectives of the technical assistance project are as follows:

    • Review and introduction, including tender preparation, evaluation of tenders and contracting of a performance based PSMC between the Company, the Akimat and a private operator with the aim to advance the management performance for more cost effective services with less energy waste. The draft PSMC has been developed by the Project Feasibility Study consultant and will be available to the Consultant upon signing the consultancy services contract.
    • Development and implementation of a Financial and Operational Performance Improvement Programme (“FOPIP”) for the Company in a close co-operation with the Manager.
    • In a close co-operation with the Manager, development and adoption of a medium-term focused Corporate Development Plan for the Company and to improve its corporate planning capacity to assist its ongoing transition towards a self-sustaining entity and commercial operations, as well as implementing the Environmental and Social Action Plan (“ESAP”) developed for the Company.
    • In a close co-operation with the Manager, development and introduction of a Management Information System (“MIS”).
    • In a close co-operation with the Manager, development and implementation of the Stakeholder Participation Programme (“SPP”) aimed at increasing public participation in the provision of water and wastewater services (service quality, rehabilitation activities, tariffs integrating poverty and social issues) and raising public awareness on issues related to the project implementation.

    AKTOBE WATER SUPPLY SYSTEM MODERNIZATION

           Aktobe is undergoing a period of significant reform of the water supply and sanitation sector. For more than 15 years, this sector has suffered from an acute lack of investment, which has led to a significant depreciation of a substantial part of infrastructure facilities and, as a result, to a deterioration in the quality of water supply and sanitation services.

          The Government of Kazakhstan has appealed to the European Bank for Reconstruction and Development to assist in the development of projects in the water supply and wastewater management sector, focusing on developing recommendations for improving the investment climate and attracting private investors, including proposals for implementing reliable and working PPP structures in the framework of the current legislation, as well as other possible forms of asset management by a private operator.

          COWI RU jointly with BDC Consulting KZ were contracted by  EBRD  for a feasibility study on  Aktobe City water and wastewater  modernization, and on the basis of this study,  EBRD provided a loan to Joint-Stock Company Akbulak, a water supply and wastewater management company in Aktobe. This loan will allow replacing part of the outdated water supply network and modernizing the wastewater treatment system managed by JSC Akbulak. As a result of the project implementation, energy and water losses will be reduced, the reliability and quality of water supply services will be improved, maintenance and operating costs will be reduced, and the negative impact on the environment will be reduced.

         The project will ensure: development and signing of the Public Service Agreement between the City Akimat and JSC Akbulak, based on international standards; introduction of commercial tariffs for water use, taking into account the full amount of the cost of services for all consumer groups, in accordance with the priority investment program, agreed with the regulatory body; exploring opportunities and developing an action plan for attracting private operators to promote management efficiency based on more cost-effective services: developing and implementing a Financial and Operating Performance Improvement Program (“FOPIP”); developing and adopting a corporate business plan; developing and implementing an information management system  (“MIS”); implementation of the Stakeholder Participation Program (“SPP”); development and adoption of a tariff calculation methodology.

          BDC Consulting KZ in consortium with  Corporate Solution Consultancy Ltd.(UK)  provides services to support the implementation of the project, including assistance with the procurement of goods and services.

    SHYMKENT WASTEWATER TREATMENT FACILITIES MODERNIZATION

          The city of Shymkent  received  a grant in 2010  from the European Bank for Reconstruction and Development for  a feasibility study on modernization of wastewater treatment plants and the construction of a biogas plant.

         Respectively, COWI RU (Russia), together with BDC Consulting KZ developed relevant assessment report  envisaged to allocate an  investment program in  two stages. The first stage has already been completed and has cost to  Shymkent Water Company 1.14 billion tenge. With these funds, a complete modernization of all equipment of the wastewater treatment plant for advanced and efficient European technologies has been made. Previously, the power consumption for aeration in aeration tanks was 800 kW per hour, now it is 500 kW per hour. Wastewater treatment indicators fully comply with state standards

          The facility has installed modern equipment and automation equipment, which may be envied by many water services companies. Everything is done for a long-term perspective with the use of innovations aimed at resource conservation. Such a masterful prudent approach distinguishes not only the sewage treatment plant, but also all the processes of the water supply and sewage facilities of Shymkent.

    AKTAU DESALINATION PLANT

          The desalination plant is currently owned by LLP Desalination Plant “Caspian”, established in 2014 as a subsidiary of Socio-entrepreneurial corporation “Caspian”, and transferred to state ownership. As a result of repair work and other rehabilitation activities carried out by the company, the installed capacity in 2015 was increased to 10 thousand cubic meters per day. Drinking water was supplied to the villages of Munayly district. With a productivity of 4.5 thousand cubic meters of drinking water per day, it was supplied to about 90 thousand people.

          From the local budget 1 billion 600 million tenge was allocated for the modernization of the plant. The second stage of modernization, which is preliminarily scheduled for completion in 2017, implies an increase in the capacity of the plant up to 40-60 thousand cubic meters / day. This plant desalinates water using reverse osmosis. Five years ago, about 30% of sea water was desalinated using this technology in the world, and 70% by thermal distillation. Now the situation has changed and about 70% of water is desalinated by the reverse osmosis method.

          The developed feasibility study in 2013 by a consortium of companies Seureca (France), COWI RU (Russia) and BDC Consulting evaluated the economic and technical effectiveness of the proposed loan to modernize the desalination plant using reverse osmosis technology. The feasibility study meets the requirements for passing the relevant approvals and State expert review (State Expertise) for the purpose of co-financing from the local budget.

    AKTAU WATER SUPPLY SYSTEM MODERNIZATION

         The Akimat of Mangistau Oblast, Public Utility Company “Kaspiy Zhylu, Su Arnasy” and the European Bank for Reconstruction and Development signed a Loan Agreement for Implementation Support for the project “Modernization of water supply and wastewater systems in Aktau”.

         Joint project of the regional akimat and European Bank for Reconstruction and Development “Modernization of water supply and wastewater systems of Aktau” involving a concessional loan of US $ 8 million and the provision of a technical assistance grant of up to US $  1.5 million to strengthen the creditworthiness of TVSiV, is the first in Kazakhstan.

         At the moment, part of the funds have already been used to develop a feasibility study for the project. This will give local authorities the opportunity to understand what problems exist in the housing and utilities infrastructure of the city and which of them need to be addressed first. The consultants have also developed a priority investment program.

    AKTOBE WATER SUPPLY SYSTEM MODERNIZATION

          Aktobe is undergoing a period of significant reform of the water supply and sanitation sector. For more than 15 years, this sector has suffered from an acute lack of investment, which has led to a significant depreciation of a substantial part of infrastructure facilities and, as a result, to a deterioration in the quality of water supply and sanitation services.

    The Government of Kazakhstan has appealed to the European Bank for Reconstruction and Development to assist in the development of projects in the water supply and wastewater management sector, focusing on developing recommendations for improving the investment climate and attracting private investors, including proposals for implementing reliable and working PPP structures in the framework of the current legislation, as well as other possible forms of asset management by a private operator.

    DEVELOPMENT OF A FEASIBILITY STUDY

          COWI specialists jointly with BDC Consulting specialists provided a service for the development of a feasibility study, modernization of sewage treatment facilities of JSC Akbulak. The technology offers to bring the level of purification to indicators of fisheries with the full utilization of sediment. Positive examination report received. The cost of modernization will be 16 billion tenge.

    IMPLEMENTATION OF THE CORPORATE DEVELOPMENT PROGRAM

          International Consulting Company Corporate Solution (UK) with a partner BDC Consulting provides services to support the implementation of the project, including assistance with the procurement of goods and services.

          The project will ensure: development and signing of the Service Agreement between the City Akimat and JSC Akbulak, updated based on international standards; introduction of commercial tariffs for water use, taking into account the full amount of the cost of services for all consumer groups, in accordance with the priority investment program, agreed with the regulatory body; exploring opportunities and developing an action plan for attracting private operators to promote management efficiency based on more cost-effective services: developing and implementing a Financial and Operating Performance Improvement Program (“PUFPP”): developing and adopting a corporate business plan: developing and implementing an information management system (“IMS”): implementation of the Stakeholder Participation Program (“PUZS”): development and adoption of a tariff calculation methodology.