37838
BEO CISTA ENERGIJA D.O.O
Dec 4, 2018
Serbia
Europe
Jun 12, 2021
A - Significant
Active
Approved : Sep 19, 2019
Signed : Oct 1, 2019
Invested : Apr 30, 2020
Waste to Energy - Waste
Infrastructure
Regional Industry INF LAC & EUR
The project consists of the following components: (i) Energy from Waste (EfW) Facility processing up to 340,000 metric tons per annum (tpa) of municipal solid waste (MSW) generating up to 29 MWe of electricity to be supplied to the grid and up to 56 MWth of heat to the local district heating company; (ii) a 3.5 MW Landfill Gas-to-Energy (LFG) Facility; (iv) a new sanitary landfill designed to dispose of up to 170,000 tpa of residual municipal waste; (iii) a Leachate Treatment Plant (LTP) for treatment of all effluents and leachate generated on site; and (iv) a Construction and Demolition Waste (CDW) Facility (crusher, sorting platform and landfill) to treat approximately 200,000 tpa of such waste. As part of the project, the company will also proceed with the closure (or remediation as defined in the PPP concession agreement and the ESIA) of the existing Vinca dump site. The project will be delivered as Design-Build-Finance-Operate-Transfer (DBFOT) scheme under a Public Private Partnership (PPP) contract awarded by the City of Belgrade (the City) to the company with a 25-year concession for operations and maintenance (O&M) of the project facilities from the date of completion of EfW and LFG facilities. Total project cost is expected to be EUR 339 million. Construction is expected to last 36 months. IFC is considering an A loan of c. EUR 70 million, a B loan of c. EUR 25 million, a parallel loan of c. EUR 35 million, and a Blended Finance loan of EUR 20 million to Beo Cista Energija d.o.o (“BCE” or the “Company”), a special purpose vehicle (SPV) incorporated in Serbia and established with the sole purpose of constructing, operating and financing the Belgrade Energy from Waste (EfW) Project (the ‘project’). The company is owned by Suez Groupe (France) (40%), Itochu Corporation (Japan) (40%) and Marguerite Fund II (France) (20%). a pan European infrastructure fund, led by Suez and Itochu (altogether the “Sponsors”).
The PPP concession agreement will provide the company with the exclusive right to treat the residual municipal waste generated by the City of Belgrade and 13 other municipalities in Belgrade Metro Region under the City’s waste management responsibility. The power produced by the project will be sold to the national electricity utility power company, Elektroprovreda Srbije, and the heat will be sold to the municipal district heating company, Beogradske Elektrane.
As part of the PPP contract, the company will fund and construct two transmission lines to connect the project to the national grid: (i) a high voltage (110 kV, 5 km) transmission line for export of the electricity; and (ii) a medium voltage (35 kV, 3.5 km) transmission line for import of the electricity. The land required to build these transmission lines will be acquired by the City and the operation responsibility will be of the Serbian National Utility Company (TSO).
The company’s facility will be connected and will deliver heat to the district heating system through an 8km hot water pipeline that will be funded, permitted and constructed by the City. The water pipeline is an associated facility per IFC PS 1 definition.
Constructions Industrielles de la Mediterranée is the Engineering, Procurement and Construction (EPC) contractor for design, building, testing and commissioning of the EfW facility. Energo Projekt is EPC contractor for (i) construction of the new sanitary landfill and CDW platforms; (ii) civil, piping and electrical works of EfW facilities; and (iii) closure of the existing dumpsite. Suez O&M Company will be the Operation and Maintenance (O&M) contractor of the project and Suez will also be responsible for constructing the LTP and LFG facilities (Teknoxgroup is EPC contractor for electromechanical work of LFG facilities).
The project site is located in the eastern part of the City of Belgrade, about 12 km from the city center, at the intersection of three municipalities (Grocka, Palilula and Zvezdara) and at about 1.5 km distance from the Danube River. The project site will be about 100 hectares (ha) and will consist of 60 ha for the new facilities and 40 ha of existing Vinca dumpsite (40 ha) that will be closed. The closest community settlement, Veliko Selo (with c. 1 594 population), is about 1.7 km from the project site.
The existing Vinca dumpsite is operated by Gradska cistoca Beograd, the Public Utility Company (PUC), owned by the City. Presently, The dumpsite accepts domestic waste, construction and demolition waste, healthcare waste and waste tires. PUC will continue to operate the existing dumpsite during the construction phase of the project. he dumpsite lacks any lining system, leachate collection and treatment, and there is neither biogas collection system nor systematic waste sorting facility. Given the lack of adequate drainage and the condition of the site, risks of instability of the waste dump are significant, particularly during or after significant precipitations. A dam or retaining structure will be designed and constructed by the City as an agreed urgent measure required for the stabilization of the body of the dumpsite, ahead of handover to the company. The project will have a positive impact associated with the closure of Vinca dumpsite, which creates significant environmental and health risks and will be replaced by an engineered sanitary landfill.
IFC’s review of this investment consisted of appraising environmental, social health and safety (E&S) and technical information either provided by the sponsors and the City or obtained by IFC team during the review. Key E&S documents reviewed included: the project Environmental and Social Impact Assessment (ESIA) and the Non-Technical Summary prepared by Egis Group (October 2018) for the lenders group; the Resettlement Plan (September 2018) and the Stakeholder Engagement Plan prepared by the City of Belgrade with the technical assistance of Link 011 (October 2018); and the E&S Scoping Study for the project prepared by Fichtner (April 2016). As part of the due diligence process, Arup was appointed as lenders’ technical advisor and environmental and social consultant.
Together with members of the other lenders’ E&S team, the IFC team had meetings with company’s and sponsors’ representatives and their consultants and conducted site visits to project area in January and June 2018. The team met with representatives of the City of Belgrade, including their working group for the preparation and monitoring of the resettlement plan, and with representatives of the PUC. The IFC team also met with project affected people (i.e., informal settlers and waste pickers).
With respect to contextual risk, social and political attention prevails in Serbia around the Roma people of whom the majority are waste pickers. It is estimated that, out of 15,000 waste pickers in Belgrade, 70% belong to Roma community. Projects having a potential impact on their livelihood or residence, receive a significant public attention through several NGOs and international organizations. Consideration was given to potential impact of the project on the project affected waste pickers’ relocation and livelihood, through consultation with stakeholders and taking into account international covenants and strategic documents such as the Roma Social Inclusion Strategy in Republic of Serbia 2016 – 2025. Further information is provided below under Performance Standard 5 and Stakeholder Engagement.