46921-014: SONGHUA RIVER BASIN WATER POLLUTION CONTROL AND MANAGEMENT PROJECT PRIVATE SECTOR FACILITY (PHASE 2)

Project Data Sheet (PDS): Details

Description

The project is the second phase of the Songhua River Basin Water Pollution Control and Management Project Private Sector Facility,1 which is part of a broader multiproject initiative under the East Asia Department and the Private Sector Operations Department of the Asian Development Bank (ADB) to address acute water stress in the Songhua River basin (SRB) of northeastern PRC. Phase 2 expands LJEPs operations into sludge treatment and improves the technical parameters of its existing WWTP projects. Specifically, it will finance investments to (i) install sludge handling units and the treatment and disposal of approximately 1,200 t/d of sludge, and (ii) the upgrade of approximately 300,000 t/d of WWTP capacity to meet higher effluent standards. Similar to the Phase 1 project, Phase 2 will use the proceeds from ADB financing to finance subprojects, which are held either directly by the firm or through wholly-owned subproject company subsidiaries. Both Phase 1 and 2 are envisaged to (i) expedite the delivery of urban water supply, sanitation, and wastewater services in the PRC; (ii) arrest increasing pollution of water resources and reduce threats to public health; and (iii) promote private sector participation in urban water supply, sanitation, and wastewater management in the PRC, among other goals.

Objectives and Scope

The project was intended to fund the first major sludge treatment and disposal development program in Heilongjiang province, and will serve as a model for future sludge project investments in the Songhua River Basin; improve the environmental performance of existing wastewater treatment facilities through process upgrades; and support private investment in urban environmental infrastructure in second- and third-tier cities, a priority area for ADB and the PRC government. The Project is the second phase of the Songhua River Basin Water Pollution Control and Management Project Private Sector Facility, which is part of a broader EARD/PSOD multi-project initiative to address acute water stress in the Songhua River Basin.

Project Rationale and Linkage to Country/Regional Strategy

The project aligns with the PRC country partnership strategy, as it promotes balanced development, resource efficiency and environmental sustainability, and private sector development; and is also consistent with the CPSs affirmation of water supply and sanitation as a priority sector. The project is consistent with ADB's Water Policy and Water Operational Plan 2011-2010, which promote investments to reverse the degradation of water resources by agricultural, industrial, and municipal effluents.

Implementation Progress

Status of Development Objectives

To be evaluated.

Status of Operation / Construction

The first drawdown under Phase 2 was made on 16 May 2013 for CNY230 million, which is the outstanding loan amount to date. As of September 2014, the company operates 15 WWTP sites with a total processing capacity of 1.94 million tons per day and three municipal water utilities of around 900,000 tons per day of treatment and delivery capacity. Of its WWTP operations, approximately 93% of capacity is contracted under take-or-pay minimum volumes. For the water utilities, LJEP operates as a service monopoly; during 2013, the volume of water supplied accounted for 50% of utility capacity, with future utilization rates expected to increase with per-capita increases in water use, the connection of newly urbanizing zones, and a continuing program by local authorities to shut independent wells (required by policy so as to meet national standards for urban water quality). A further 2 WWTP projects are under construction or planning stage, and will be completed by December 2014; after a brief commissioning period (typically 1-2 months), COD will be in early 2015. The WWTP additions represent an incremental 10% in the company s wastewater capacity. Another 3 projects in sludge treatment and disposal are also underway, with the Harbin Pingfang District Sludge Project being the largest, at 650 t/d of capacity.

Safeguard Categories

Environment: B
Involuntary Resettlement: B
Indigenous Peoples: C

Summary of Environmental and Social Aspects

Environmental Aspect

In compliance with ADBs Safeguard Policy Statement (2009), the project is category B for environment. LJEP has established an environmental and social management system (ESMS) and undertakes extensive and real-time environmental monitoring, monthly reporting, and annual performance audits. To date, LJEP has complied with national, provincial, and local environmental requirements and maintained ISO 14001-2004 certification. Subprojects are located at existing sites in suburban areas designated for industrial use, so land acquisition will be minimal. Hence, with respect to involuntary resettlement the project is category B, while for indigenous peoples the project is category C.

Involuntary Resettlement

NA

Indigenous Peoples

NA

Stakeholder Participation and Consultation

LJEP will comply with ADBs Social Protection Strategy and report regularly to ADB on compliance including that of its contractors with national labor laws consistent with internationally recognized core labor standards. The revised ESMS, to be submitted prior to disbursement for the first subproject, will incorporate the social protection requirements and the requirements of ADBs Public Communications Policy (2011).

Project Sponsor

LONG JIANG ENV'T PRO-SLUDGE (PH 2)

 

Project Data Sheets (PDS) contain summary information on the project or program. Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.

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