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SERBIASERBIAN CLIMATE RESILIENCE & IRRGATION PROJECT

TECHNICAL, ENVIRONMENTAL AND SOCIAL DUE DILIGENCE

Terms of Reference

1. BACKGROUND

Agriculture is an important segment of Serbia’s economy contributing 6 per cent to country’s GDP or 9 per cent including food processing in 2017. It also accounts for 17 per cent of employment in Serbia. Agricultural exports, including food processing, have reached approximately 16 per cent of total exports.

Over the last decade, Serbia has experienced periodic natural disasters as a result of climate change which had a serious impact on its agricultural sector and economy. The three most recent events were droughts in 2012 and 2017, and floods in 2014. The latter caused economic losses estimated at EUR 1.8 billion from lost crop production with some crops yields decreasing by 50 per cent. The 2017 drought caused estimated economic losses of between EUR 0.6 to 1 billion with some crop yield reducing by 20 per cent.

Water for irrigation is principally taken either from below-ground aquifers or above-ground river sources, conveyed through canalised networks, occasionally stored in artificial ponds (“accumulation lakes”) before being distributed through local water networks for use on crops. Only 120,000 hectares of farmland is served through formal irrigation systems with informal arrangements predominating; here poor irrigation practices preclude farmers from diversifying to higher value crops.

Serbia is intensifying its efforts to increase its climate resilience and promote sustainable use of its resources, in particular in agriculture which is a substantive water user in the country. In January 2018, a MoU was signed between the Ministry of Agriculture, Forestry and Water Management of the Republic of Serbia (“MAFWM”), UN Food and Agriculture Organization (“FAO”) and EBRD (the “Bank”) agreeing to implement joint activities aimed at strengthening Serbia’s agri-food sector. The MoU sets out agreement on future cooperation noting that the Government of Serbia has identified the rehabilitation and modernisation of existing water management systems as its top priority.

The FAO carried out two field missions in 2018 during which they met various stakeholders including, government agencies, MAFWM, farmers, municipalities and engineering companies. They confirmed the need for expansion and upgrade of irrigation infrastructure and identified a pipeline of projects which include those to be financed from the proposed loan.

In this first phase, a loan of EUR 15 million has been agreed between MAFWM and the Bank to finance three priority investments:

- Component 1: Construction/rehabilitation of primary irrigation infrastructure in the Negotin region (eastern Serbia) to provide reliable access to irrigation water to approximately 2,000 hectares (“ha”) of land. The Negotin region has a number of farmers involved in higher value added fruit and vegetable production which are expected to benefit from connecting to the newly proposed irrigation infrastructure. Feasibility studies had been prepared in Kusjak, part of the Negotin region, and designs are currently under preparation.

- Component 2: Rehabilitation of two small independent accumulation lakes at Pavlovci and Borkovac in Vojvodina (northern Serbia). The lakes were constructed in 1970s have become silted from a lack routine maintenance. Sediment removal will lead to increase in capacity.

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These two lakes are critical for reliable irrigation of a number of farms located in their vicinity.

- Component 3: Provision of a new irrigation system “Resavska Celina” to realise 1,042 hectares of land with a reliable water source. That system consisting of 15 shallow wells, three river intakes structures and approximately 6km of irrigation pipeline plus all pumping equipment. Conceptual designs and a technical feasibility study defining the need and recommended irrigation solution have already been prepared.

The investments will be implemented through MAFWM’s Water Management Directorate and two Public Water Management Companies: Srbijavode and Vode Vojvodine.

2. OBJECTIVES

The Bank wishes to commission a suitably qualified consultant (the “Consultant”) to conduct a Technical, Environmental and Social Due Diligence (“TESDD”) of the Project. The Consultant will evaluate the technical, environmental and social risks, potential impacts, and benefits of the Project in general and of the EBRD financed component in particular.

The overall objective of the assignment is to provide detailed information that the Bank can use to appraise the Project and take a decision on the prospective financing of the EBRD component.

The specific tasks of the Consultant will include, inter alia:

Review the present and planned water balance assessments at the basin level and confirm the Project’s technical rationale, taking into account other water based programmes – such as to-be-developed national irrigation strategy - and plans at the basin level as well as international best practice.

Review the present and planned irrigated agricultural activities in the Project areas (Negotin region, Vojvodina Province and Resava Valley) and confirm the Project’s economic rationale, taking into account the agriculture market, water users and tariffs, relevant organisational arrangements, and other agricultural initiatives at the basin level.

Conduct a technical, environmental and social audit of the facilities associated to the EBRD financed component and identify risks that could affect the Project’s operation, its social and natural environment or the Bank's reputation.

Based on the existing documents assess whether the Project is technically sound, and whether the proposed investments, and in particular the EBRD financed components is the most effective and most economically advantageous investment to ensure an uplift in climate resilience.

Identify the risks (incl. climate risks) that might affect the Project’s viability, in terms of consequences and likelihood, and identify the actions/measures that are necessary to mitigate these risks.

Confirm the Project timeline and identify priority measures in line with the Project. This shall be on technical, economic, environmental and social viability, preparedness for implementation.

Assess the economic, social, environmental water-/energy-efficiency and climate resilience benefits of the Project, using appropriate benchmarks as set out below and in the GET Handbook.

Determine how specifically the project will support competiveness of crop farming, improve operational practices and efficiency including determination of current water usage in the

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target land (as far as practicable) and the expected water savings to be achieved through the Project.

Carry out an economic analysis of the Project, including IRR and EIRR.

Establish the opportunity for the use of renewable energy solutions (as an alternative or complimentary source of power) where it is practical and cost effective to do so

Review the opportunity for Private Sector Participation.

Elaborate the most appropriate implementation strategy in line with EBRD’s Procurement Policies and Rules; and review implementation capacity of MAFWM, of the Water Management Directorate (“WMD”) and its two Public Water Management Companies (“PWMCs”), recommend the Project Implementation Unit (PIU) structure (team to be responsible for the Project implementation on behalf of the borrower) identify potential gaps and the changes and capacity building needed.

Determine an efficient implementation strategy for the EBRD financed component.

Assess the expected economic impact of this investment on men and women users of the water services to be provided and, specifically, the extent to which this investment is expected to create economic opportunities for women and men in the project areas.

Calculate EBRD’s standard measuring indicators and Sustainable Resource Initiative (“SRI”) impact indicators (see Attachment B).

Carry out an Environmental and Social Due Diligence of the EBRD financed component in line with the requirements of EBRD’s 2014 Environmental and Social Policy and associated performance requirements (“PRs”) for EBRD “B” category projects, to identify its environmental and social risks, impacts and benefits and to structure the Project to comply with the EBRD’s Environmental and Social Policy (“ESP”) and PRs. including the preparation of an Environmental and Social Action Plan, Resettlement/Livelihood Restoration Framework, Non-Technical Summary and Stakeholder Engagement Plan.

Assess the impact of the Project on climate change and the impacts of climate change on the Project:

- take into account the projected impact of climate change on the Project in order to build in resilience to identified climate risks;

- assess the resource efficiency gains and opportunities (including energy and water efficiency and the impact on greenhouse gas (“GHG”) emissions) on the Project and identify appropriate resource efficiency benchmarks for measuring improvements as a result of the Project, in line with the EBRD’s Green Economy Transition (“GET”) approach.

In particular, for Component 1: - Carry out analysis of existing documentation and proposal of necessary

documentation to update the project for obtaining a building permit and a water permit.

In particular, for Component 2: - Perform qualitative and quantitative analysis of sediment (sludge) to determine the

estimated volume and its characteristics;- Suggest a place where sediment (sludge) will be safely disposed and optionally its

subsequent reuse (e.g. in agriculture, earthworks etc);- Suggest application of possible technologies for removing sediment (cleaning) of

accumulation lakes effectively taking into consideration the specifics of the two lakes;

- Analyse several predicted climatic scenarios to assess demand for water from irrigation, accumulation lake recharge and the ability to supply water under the conditions investigated

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- Propose technically, economically and environmentally most viable solution for dredging the sediment and to minimise or mitigate water losses during sediment removal;

- Assess any additional repairs necessary to secure the integrity of the accumulation lake structures – such as embankment stabilisation - in the short, medium and long-term

- Submit a list of documents needed to obtain a building permit or other relevant permits or approvals as applicable, and a water permit based on the obtained data (quantity and quality of sediment (sludge)) and in accordance with the legislation;

- If a building permit is required, assess which party is responsible for applying for a building permit considering the ownership of relevant land parcels on which the accumulation lakes are located.

In particular, for Component 3: - Assess the efficacy of the proposed solution in terms of it representing the least cost

and most sustainable proposal to assure water security (resilience) needed. - Assess the environmental and social consequences and its benefits- Validate the costs- Assess the adequacy of the building permit, any revisions and risks - Analyse several predicted climatic scenarios to assess demand for water from the

defined irrigation plots and the ability to supply water under the conditions investigated

3. SCOPE OF WORK

In order to meet the assignment objectives, the Consultant will undertake the following tasks:

3.1. Project Baseline and Context

The following will, inter alia, be addressed:

3.1.1. Project description

Based on information provided by the MAFWM, the Consultant will provide a description of the Project and in particular of the EBRD financed components providing the necessary information required to understand the technical, environmental and social context and content of the Project, including:

Location maps (general and detailed), showing irrigated areas, inhabited areas, other large or linear infrastructures and sensitive areas (e.g. areas designated for biodiversity reasons; cultural heritage, etc).

Design criteria and key technical, social and environmental figures and information and functional parameters.

Irrigation infrastructure configuration Accumulation lake design

3.1.2. Socio-Economic Data

Based on 3-5 years of historical data and information readily available (data generated by the Company and the City, and other relevant sources) the Consultant shall compile and present socio-economic data of interest for and relevant to water and wastewater operations, inter alia:

Present analysis on population and agricultural production, including historical development (the number of people, general spatial distribution, in and out migration, minority and vulnerable groups, etc.), trends, growth rates, and review of proposed municipal development plans to obtain basis for population projections.

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Compile and present sex disaggregated data as described in Section 3.1.7 Gender Assessment Present an overview of consumption behaviour of current users, particularly water

consumption and level of awareness on efficient water use.

3.1.3. Organisational and institutional review

Taking into account available information, the Consultant will describe the organisation and management systems of the sector in general, MAFWM and of the Project Area. More specifically, the Consultant’s report will include comprehensive information as detailed below:

Describe the legal and institutional framework governing the status and operations of MAFWM and of the Water Management Directorate (“WMD”) and two Public Water Management Companies (“PWMC”) (legislation, statutes, service agreements etc.) and define if any changes are needed for an efficient implementation of the Project and of the EBRD financed components.

Describe any interactions between MAFWM and representatives of consumer groups and other stakeholders, including any related authorities such as a water basin agency etc. if relevant.

Describe the different categories of water users (building on the socio-economic information), organisations and cooperatives and their organisational arrangements including water user associations or equivalent if relevant, giving details of any legislative basis for their existence and roles, identify ways in which to partner and work through them to reach end users and any priority capacity development priorities, if relevant.

Describe in detail the organisational set-up of MAFWM and PWMCs and assess the technical support required to build their or other relevant parties implementation and operational capacity in order that the Project is delivered effectively and efficiently, owned and operated responsibly. Assess the need for development of a capacity building plan for local farmers.

Based on the previous task outcome recommend the most appropriate PIU structure, ToR outline and staffing;

Review the legislation and appetite for private sector participation. This review should be made in light of the previous experiences in Serbia.

Identify shortcomings of the current organisational/institutional framework and make recommendations on how to enhance them.

Identify shortcomings of the current governance structure, including any regulations or conflicting mandates that could potentially hinder effective governance, and how these shortcomings might impact the delivery of water from the dam. Propose feasible improvements in the medium term.

Identify any legal requirements for the implementation of the Project.

3.1.4. Tariff Setting and Subsidy Payment Policy

The long term financial health of the Project area is partially reliant upon: (i) a tariff setting formula/ methodology that allows for the recovery of all recurrent costs including capital investment costs; (ii) adequate billing and collection practices; and (iii) receipt of adequate subsidy payments when consumer tariffs are below cost recovery levels as well as other risk mitigation factors. The Consultant will, inter alia:

Assess the current price regulation mechanisms (e.g. tariff regulation), and identify legal requirements influencing the implementation of the investment programme.

Describe the existing and prospective (Project related) tariff setting methodology with regard to irrigation services provided to individual farmers or underground water use by farmers. Compare the existing tariff to comparable international benchmarks.

Describe the required tariff setting mechanism and a transparent government subsidy mechanism to make the irrigation system financially sustainable – (i) by covering operating

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and maintenance costs, (ii) covering operating, maintenance and all capital costs if and where feasible and (iii) provide adequate returns to the concessionaire.

Examine the current billing and collection methodologies/practices and recovery rates by consumer groups and provide an opinion to the Bank in accordance with industry best practices, taking into account the roles of any WUAs if applicable and relevant. Evaluate this in the context of farm-level economic data and similar experiences, in order to draw conclusions on water pricing for farmers and their willingness to pay.

Identify any cross subsidies and provide potential alternatives for the orderly phasing-out of cross-subsidies, ensuring that consumer tariffs remain affordable.

Describe the mechanism for calculation and payment of subsidies and compare this against international practice, including whether and how subsidies are used to achieve industrial/development policy objectives.

Identify what the Bank may require in terms of tariff/subsidy policy for the Project (with specific timing).

3.1.5. Affordability

The Consultant shall establish at which levels tariffs would be affordable to users of water without causing a socially or politically unacceptable financial strain to the households.

For example, if the data is available, the Consultant shall examine differences in the affordability to pay for the services by different socio-demographic groups at both individual and household level (i.e. females and males; single-headed households, elderly; people living with disabilities, ethnic minorities and vulnerable groups in the community) and reflect them in the affordability analysis and the assessment. The Consultant should follow EBRD methodology on affordability analysis.

3.1.6. Resilience to climate change

The Consultant will prepare a baseline study taking into account the current climatic conditions and projected climate change in so far as they have the potential to affect water supply and irrigation services.

The Consultant will compile and analyse readily available data on existing climate conditions and future climate projections at the Basin level, determine the risks associated with climate change and advise on the level of confidence associated with climate change projects and the implications for the Project.

The Consultant will assess the implications of climate change arising from analysis of this data including: rising temperatures, precipitation levels, adequacy of and changes in water supply, power supply, energy availability and energy costs, asset protection and maintenance, water demand and changes in demand including through changes in agricultural practices.

Please refer to Attachment A for guidance on integrating climate change impacts analysis and robust adaptation measures into project development.

3.1.7. Gender assessment

The Consultant will conduct a gender assessment of the Project:

Compile and present sex disaggregated data on men and women irrigation user’s types of economic activities (and relevance of irrigation to these), commercial versus subsistence farming, incomes and expenditures including estimates of income per hectare for different types of farmers, asset ownership (agricultural land in specific), number of breadwinners, average expenditures for essential goods and health care, educational levels, profile and geographic distribution of poverty, occurrence of water related diseases, people living with disabilities, and other data needed to identify respective needs and concerns of different

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disadvantaged groups and/or those with less voice, such as women, to be addressed in the design, implementation, and monitoring and evaluation of the Project, with the data disaggregated by sex where possible. This data will provide insights about to what extent farmers depend on irrigation and the potential for improvements.

Define the decision-making process for water use, as well as women’s representation in the relevant decision-making bodies. Identify the key actors in this area and formulate a stakeholder mapping/analysis.

Review the agricultural water distribution and irrigation patterns, women’s participation in the decision-making process, how the information on irrigation turns is equally accessible to men and women farmers, whether physical strength is required to handle it (which in turn would require technology adaptation, degree of knowledge and training to meet women’s needs), whether all irrigators can directly request water for irrigation or use it only when it is their turn and, finally, in case of water shortages, how is the available water shared between users. As for irrigation patterns, how much time do men and women respectively dedicate to irrigating the field (break-down by type of irrigation).

Identify the needs and challenges women farmers face in operating irrigation equipment, as well as the level of knowledge with regards to efficient production and water use. Identify current levels of access to existing training and capacity building activities, additional training needs of women and men farmers and staff in irrigation management and associated practices, for instance in installation and repair of irrigation infrastructure.

Review existing policies, regulations and governance structures of irrigation activities with a view to identify potential gender gaps or areas for improvement that would help increase women’s access to economic opportunities.

3.2 Technical Assessment

3.2.1. Technical Assessment – Irrigation Water

The Consultant will describe and assess the key attributes of the current service (including individual or farm-owned systems) and the service development in the Project area over the last 3 years, including inter alia:

Irrigation supply, storage and distribution system : For Component 2, analyse existing users and the way of better utilizing the limited water

available from the lakes. Assess related risks which could emerge as a consequence of sediment removal taking into account potential water losses in the process.

Determine options for sediment removal, recommend an approach setting out the broad method of work, advantages and disadvanatges

Assess the impact relating to lowering of water levels in the two lakes following completion of the works especially considering that the lakes are filled only from precipitation.

For Component 2, analyse weather/climate-related scenarios on demand for water and propose the most economical, technologically sound and environmentally most sustainable solution for recharging and maintaining water level in the lakes, beyond current precipitation.

Identify remediation works considered necessary to assure the integrity of the accumulation ponds

For Component 3 assess the impact relating to abstracting water from groundwater and river sources as proposed

For Component 3 confirm if the solution proposed is the most resilient to the predicted impacts of weather/climate-change and that the recommended solution is the most economical, technologically sound and environmentally most sustainable solution for the needs of farming communities in Resavaka Celina.

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Provide an inventory of existing irrigation infrastructure and field application methods and facilities: irrigation, transmission, pumping, storage, distribution, main valves, hydrants, flow control and measurement devices etc, and present a schematic map.

Provide more detail on how farms are irrigated and how willing farmers are to change irrigation methods and cultural practices and cycles. This inventory shall include historic infrastructures used for irrigation as well as recently built infrastructures formally or informally in the Project area.

Provide an inventory of the existing and planned water sources: chemical and biological quality of water, seasonal fluctuations in water quality and quantity and monitoring of water policies and practices. Taking into consideration the medium-to-long-term trends of predicted climate change impacts on the water availability in Serbia, assess whether the water resources planned to be used for the Project could be vulnerable to climate change risk.

Analyse the present and planned irrigation and agricultural activity by type of agricultural entity (subsistence farmers, e.g. <5ha, versus commercial entities): water consumption efficiency, types of crops and their water requirements, irrigation methods, role of administrations and institutions, organization, land use, economic drivers, employment and workforce. Determine the potential for effective underground water consumption reduction through a change of agricultural and irrigation practices (including a shift towards less water demanding crops), while not reducing the level of employment. Identify the opportunities and risks from a social, organizational, institutional and economic point of view. Assess the risk of displacing underground-based irrigation to neighbouring areas.

Comment on feasibility of usage of alternative water sources from a technical and environmental sustainability perspective.

Comment on the feasibility of using alternative energy sources (as appropriate). Assess the main components of the irrigation infrastructure components in terms of capacity,

resource efficiency, operational requirements (including water allocation on dry years), technical and environmental performance, maintenance requirements, age, quality of materials and equipment (treatment plants, canals, pipes, valves, pumps, etc.), adequacy, bottlenecks, etc. and outline and assess leak detection/repair policy.

Assess the vulnerability of the proposed infrastructure to climate change (e.g. effects changes in water availability, water quality such as temperature increase).

Analyse and compare current irrigation costs resulting from pumping (e.g. fuel costs) with tariff costs related to improved irrigation techniques to ascertain potential incentives adopting new technologies.

Assess the short and long term suitability and sustainability of the proposed water sources for irrigation in or associated with the Project area.

Assess the potential impact of the Project on the sustainability of the local agricultural sector in terms of water/resource efficiency as well as productivity, employment, a potential shift to higher value crops and growth potential for subsistence farmers.

Assess the investments needs for farmers to switch to a new irrigation mode, how they may be incentivised the need for training and the risk of loss of livelihoods as a result of reduced revenues during the transition period.Assess current maintenance management practices and identify how these could be improved to sustain the proposed investments

3.2.2. Detailed description and cost estimates

The Consultant will establish cost estimates for the Project components and will benchmark the costs against similar type of works in the region. Where cost estimates for individual components / type of works / materials are not readily available or are cursory in nature, the Consultant will engage with relevant organisations/ agencies/ experts to obtain the necessary cost estimates. An example of a simplified investment cost breakdown format is shown in the table below.

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Component Estimate % DistributionPrice terms (e.g. EUR 2019)

Year 1 Year 2 Year 3 Year n

Capital expenditureComponent 1 - - - - -Component 2 - - - - -Etc. - - - - -

Total capex - - - - -

Each component cost estimate shall be further broke down by main types of works / materials / equipment / etc depends on nature of component. Inflation forecast shall also be taken into account for the envisaged execution period.

The base cost of each priority upgrade will be based on expenditure category. The costs will be expressed at prices in effect at the date of estimation and include all intervention-related costs irrespective of financing source and whether they may be considered for EBRD financing. For each component, the base cost will be allocated over the entire implementation period, based on realistic expectation of when the expenditures are likely to be incurred. The Consultant will also consider incremental recurrent costs, to farmers, the concessionaire and infrastructure operators in particular, which (depending upon the nature of the intervention and the desired outcomes) may be critical elements of total EBRD financed component costs. The returns for the different stakeholders of the Project, based on tariff scenarios and contractual arrangement options should also be estimated. These could include salaries of agency employees assigned, project management office administrative costs, etc.

The Consultant will incorporate allowances for potential increases above the most likely scenario in the physical contingency. The EBRD financed component design will be refined to reflect a level where EBRD would normally expect for the physical contingences to be set i.e. 5–10% of the base cost. The Consultant will also make provision for price contingencies in order to take into account local and foreign inflation, as well as take into consideration the taxes and duties in unit prices.

The Consultant will also provide an assessment of the operation and maintenance costs for the EBRD financed component.

3.2.3. Inclusion benchmarks

The Project seeks to improve regional inclusion through improved access to irrigated land for local farmers and increased use of water efficient irrigation technologies. The Consultant will recommend reasonable benchmarks associated with market expansion/economic inclusion, e.g.:

Increased coverage of land under drip irrigation from [X] to [Y] per cent and yield form x to y per cent.

Increased use of modern (drip) irrigation systems by farmers from [X] to [Y], with strong emphasis on subsistence farmers

Increased yields form [X] to [Y] per cent for both commercial and subsistence farmers. Increased number of women among water supply users from [X] to [Y] per cent (where

there is a clear link to improved economic opportunities). Increased number of men and women local farmers trained on operating irrigation

equipment from [X] to [Y] per cent. Increased number of women in governing body (water user association from [X] to [Y]

Time women devote in collecting water because of improved access to irrigation water supply reduced from [X] to [Y] per cent (where there is a clear link to improved economic opportunities).

3.2.4. Demand risk

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The Consultant will assess the demand risk and confirm whether there will be sufficient demand from the individual farmers for using newly created and/or rehabilitated water supply and storage infrastructure to economically justify the Project and will enable the repayment of associated EBRD/ other debts.

3.2.5. Procurement and Implementation Strategy

The Consultant will prepare a Procurement and Implementation Strategy taking into consideration the Bank’s Procurement Policies and Rules, (“PP&R”) which can be accessed on EBRD website through the following link: http://www.ebrd.com/downloads/research/policies/ppr10.pdf.

The Consultant will present and assess which procurement and implementation strategy would best fit the scenario, outlining pros and cons for each alternative, and draft a preliminary procurement plan, including detailed descriptions of project components and expected contracting packages.

The Consultant will develop an implementation schedule for each EBRD financed component subcomponent, describing the manner in which the construction or implementation activities will proceed and providing assumptions about procurement, delivery and execution times.

In the preliminary procurement plan the EBRD financed subcomponents will be broken down into specific contracts with the aim of keeping the number of said contracts to a minimum. The Consultant will take into account the services (tender documents, project management and supervision), supplies and works needed to implement the required contracts. The Consultant will consider which procurement approach (e.g. based on different supply and works contracts or a turn-key contract) would be the best way of implementing each investment component and elaborate on pros and contracts of each option.

The Consultant will also cover the following aspects with regard to the EBRD financed component implementation:

EBRD financed component risk matrix - a risk matrix outlining the key challenges and risks associated with the EBRD financed component and the measures proposed to deal with them.

EBRD financed component institutional plan – a proposal on how to address the key shortcomings identified in the institutional framework. This will include appropriate incentive structures, and any contractual agreements required. Consideration will be given to effective regulation and monitoring of the sector.

3.3 Economic Analysis

3.3.1. Economic analysis of the Project

The Consultant will carry out the following specific tasks:

Review the economic rationales and justifications for the proposed Project components and for the EBRD financed component.

Study and confirm the financial and economic viability of new and innovative technology, specifically in economic savings, to be achieved in the Project.

Estimate the 30-year outlook of the potential water, energy and – separately – maintenance cost reduction that can be achieved through the Project.

Carry out cost-benefit analysis for the project and assess the financial impact of the Project by comparing the incremental costs (capital and recurrent) of the Project and of the EBRD financed component in particular with the incremental revenues or savings it will generate and estimating the financial internal rate of return (“IRR”) and the economic rate of return on the investment (“EIRR”).

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3.3.2. Analysis of upgrade measures that deliver efficiency savings

The water conservation programme may include improvements in technologies, physical assets and/or practices that allow greater efficiency in the use of various inputs (e.g. energy, water, etc.) and thereby generate cost savings. Such measures should yield benefits that outweigh the costs in the short- to medium-term, and generate a positive IRR. It is envisaged that such measures can be introduced through the irrigation PPP contract, for which the Bank will provide technical support.

Inputs for the calculation of efficiency savings

Opportunities for efficiency savings may be driving improvements in the use of energy, water, labour or other inputs such as fuel or replacement equipment/parts. The table below provides examples of the categories of measures that may deliver such efficiency savings (please note that this list is non-exhaustive) and also outlines the key data that would need to be collected in order to assess quantitatively (and in financial terms) the savings that could be achieved.

Table: Examples of upgrade measures that deliver efficiency savingsCategory (indicative)

Examples of possible measures

Nature of efficiency saving

Data required for financial analysis

Unit of measurement (typical)

Electricity use Variable speed pumps/Variable frequency drives

Automation Correctly sized pumps Improved pump

maintenance regimes Alternative energy sources

(e.g. solar pumps; on-site bioenergy, etc.)

Reduced electricity consumption (e.g. kWh)

Electricity tariff:- At present time- Projected over the

lifetime of the investment

EUR/kWh

Water use Covered pipelines Sprinklers Drip irrigation Automation (e.g. SCADA)

Reduced water consumption or abstraction (e.g. m3)

Water tariff- At present time- Projected over the

lifetime of the investment

EUR/m3 (if volumetric)

or

EUR/yr if based on a flat fee

Sediment Avoided cost of landfill Volume of sediment reused (m3)

Cost of landfill disposal

Eur/m3

Fuel consumption

Modern and more efficient machinery

Connection to electricity grid to eliminate need for generators

Gravity irrigation instead of pumped irrigation

Reduced fuel consumption (e.g. litres consumed)

Price of fuel (e.g. diesel)- At present time- Projected over the

lifetime of the investment

EUR/litre

Labour inputs Automation Improved training

Reduced labour costs (e.g. worker time needed)

Typical salary per employee

or

Daily/hourly wages- At present time- Projected over the

lifetime of the investment

EUR per unit time (year, month, day or hour)

Other inputs Longer lasting/more reliable equipment

Reduced maintenance / replacement costs

Cost of equipment items

Maintenance cost of equipment items

EUR per equipment item

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Category (indicative)

Examples of possible measures

Nature of efficiency saving

Data required for financial analysis

Unit of measurement (typical)

Expected lifespan of equipment items

The Consultant will collect information about prices and/or tariffs associated with the use of resources such as electricity and water, as well as other inputs such as fuel, labour, etc. In order to perform the preliminary cost benefit analysis over the anticipated lifespan of the assets, the Consultant will use projected future tariffs/prices that reflect anticipated increases in these costs over time.

Calculation of potential efficiency benefits

Using this information, the Consultant will then calculate the key efficiency savings or benefits that may be delivered by the upgrade measure in question. While the specific indicators to be calculated will depend upon the irrigation system, they will usually include the following:

i) Amount of water losses eliminated.ii) Amount of lake sediment re-used (avoided cost of landfill)iii) Reduction in total GHG emissions.iv) Annual reduction in tonnes of CO2 equivalent derived from the lowering of water losses system-

wide.v) Reduction in water consumption.vi) Change in value for water.vii) Change in value for land.viii) Total population benefitting from improved access to irrigation services.

The Consultant will then identify the most appropriate indicators, to be used at the overall Project level to measure the Project’s impact on resource efficiency, in line with the Bank’s GET approach.

Calculation of potential financial benefits

The Consultant will conduct a preliminary cost-benefit analysis of each improvement measure that has the potential to deliver efficiency savings, using the following measures:a) Payback timeb) Internal rate of return (IRR)c) Net present value (NPV)d) Benefit-cost ratio (BCR)

In order to carry out this cost-benefit analysis, the Consultant will develop an Excel-based model that assesses the financial viability of the upgrade measure in question. The ultimate goal of this step in the methodology is to determine which priority upgrade measures have the potential to deliver a positive return on investment as well as other economic benefits (eg. productivity gains) and therefore be suitable for loan financing.

3.3.3. Analysis of upgrade measures that deliver productivity gains

Inputs for the calculation of potential productivity gains

Examples of the indicators that may be used in this analysis are shown in the table below. The comparison of the key indicator of returns to land with the likely investment cost provides the initial screening of potential interventions. Given that likely gross returns to land exceed the likely investment cost, a cost benefit analysis to establish the feasibility of the intervention is required.

Table: Examples of indicators used in analysis of water service improvementsCategory DescriptionWater balance Change in water consumption (km3/yr; EUR/yr)

External indicator – land: EUR per hectare

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Category Description External indicator – water: EUR per cubic meter External indicator – labour

Crop model Yields Cropping intensity Water productivity indicators including yields/water used and value-added/water used for

different crops Total output value Labour/output value Materials/output value Total variable costs/ha Gross margin/ha (Local and EUR) Total expenses including rent Net income including rent Gross margin/expenses Total water used by source (ML) by unit area (ha) and unit time (year) Total water costs (EUR) per unit time and unit area Gross returns to water (EUR/ML) Net return to water (Local and EUR)

Energy use (if applicable)

Reduction in electricity (or other energy) consumption (kWh, toe/yr, EUR/yr) Reduction in GHG emissions (tonnes CO2/yr)

Calculation of financial benefits

The Consultant will conduct a preliminary cost-benefit analysis of each upgrade measure that has the potential to deliver productivity gains, using the following measures:e) Payback timef) Internal rate of return (IRR)g) Net present value (NPV)h) Benefit-cost ratio (BCR)

In order to carry out this cost-benefit analysis, the Consultant will develop an Excel-based model that assesses the financial viability of the upgrade measure in question. The ultimate goal of this step in the methodology is to determine which priority upgrade measures have the potential to deliver a return on investment and therefore be suitable for loan financing.

3.3.4. Analysis of priority upgrade measures that deliver both efficiency savings and productivity gains

It is also possible that some of the priority improvements measures may deliver both efficiency savings and productivity gains. In such cases, the Consultant will conduct a preliminary cost-benefit analysis of such measures that combines both approaches.

3.3.5. Analysis of priority upgrade measures that are ‘neutral’

The Consultant’s assessment may also result in the identification of priority improvements measures that are neutral and do not generate directly efficiency savings or productivity gains. However, such measures may be considered important to stakeholders for other reasons, and may play a more general, enabling role in improving the system as a whole. Where such priority measures are identified as a significant part of the assessment recommendations, they should not be subjected to preliminary cost-benefit analysis but should instead be noted and considered carefully as part of the assembly of the proposed investment package.

3.4 Business Model for Recovering Investment Costs

3.4.1. Describe ownership and management structure of the irrigation system

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The Consultant will determine the ownership and management structure of the irrigation system. This analysis needs to be conducted taking into account the four levels of analysis and intervention: i) on-farm level, ii) sub-system level; iii) system level; and iv) government level. This will be informed by the socio-economic analysis and description of water users and their organisational arrangements (including WUAs if relevant), to be carried out as part of the baseline assessment and as set out iearlier in this Terms of Reference.

Table: Illustrative breakdown of levels/entities involved in irrigation improvementsLevel Examples of entities

1 On-farm Individual farmsCollective farms

2 Sub-system

WUAs if relevantRegional/local branch of irrigation agency or company

3 System National irrigation agencyRegional irrigation agency or companyGovernment ministry

For each of the levels of entities set out above, the Consultant will describe: a) governance framework, b) structure of the organisation, c) rights, powers and responsibilities.

3.5 Environmental and Social Due Diligence

The EBRD financed component is categorised “B” under the Bank’s 2014 E&S Policy. As part of the ESDD the Consultant shall confirm the categorisation as soon as possible and prior to proceeding with the E&S assessment task, alerting EBRD at the earliest possible opportunity of any potential change in the categorisation.

The Consultant will carry out an Environmental and Social Due Diligence (ESDD) of the EBRD financed component meeting the EBRD requirements for “B” category projects. The ESDD report will be written in careful and factual terms that allow its disclosure and the results integrated where necessary with the technical due diligence.

The ESDD is to be carried out in accordance with: Applicable local, national and regional requirements; The EBRD’s ESP (2014) (and the incorporated Performance Requirements (PRs)) and

relevant European Union (EU) requirements; Relevant international conventions and protocols relating to environmental and social issues,

as transposed into national legislation.

3.5.1. Objectives and scope of work

The Consultant’s objective to identify and assess any potentially significant future adverse environmental and social impacts associated with the proposed Project and EBRD financed component in particular, assess compliance with applicable laws and the EBRD ESP and PRs, determine the measures needed to prevent or minimise and mitigate the adverse impacts, and identify potential environmental and social opportunities, including those that would improve the environmental and social sustainability of the Project. The assessment process will be commensurate with, and proportional to, the potential risks, aspects and impacts of the Project and of the EBRD financed component, and will cover, in an integrated manner, all relevant direct and indirect environmental and social aspects and impacts of the Project and of the EBRD financed component, and the relevant stages of the project cycle (e.g. pre-construction, construction, operation, and decommissioning or closure and reinstatement).

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The environmental and social assessment (as defined in Section 3.5.3) will also determine whether complementary studies may be required, focusing on specific risks and impacts such as climate change, land acquisition, human rights, health and safety, vulnerable groups and / or gender equality.The Environmental and Social Audit (as defined in Section 3.2.2) is required to assess the Client’s current operations in terms of compliance with national legislation, national or local permitting requirements, the relevant provisions of the EBRD Environmental and Social Policy and Performance Requirements (2014) and pertinent EU environmental standards. Further, the audit must review possible historical environmental and social issues, such as potential contamination of soil and/or groundwater or land acquisition disputes.

The Consultant will undertake the following work in accordance with the requirements of the Bank’s ESP (2014):

Identify EBRD financed component-related environmental and social impacts and risks; Describe and characterise a relevant environmental and social baseline commensurate with

the risks posed by the EBRD financed component; Develop a draft ESDD report to cover the Bank’s requirements (as defined in the ESP),

including a Biodiversity risk assessment and a Compliance Summary table with the Banks’ PRs;

Develop a resettlement/land acquisition and compensation framework; Prepare a draft Stakeholder Engagement Plan (SEP), draft Environmental and Social Action

Plan (ESAP) and draft Non-Technical Summary (NTS); Identify if any additional studies will be required to cover relevant aspects in greater detail

(eg. biodiversity, resettlement, retrenchment, etc.). Any such work will be commissioned under separate Terms of Reference (conducted by a different consultant; and,

Finalise all documentation further to the EBRD’s and the MAFWM’s comments.

3.5.2. Review of Available Data and Site visit

The Consultant will Review any studies and baseline data available from MAFWM, PWMCs and from any other

available sources relating to relevant, existing works. Identify and assess relevant regional and strategic environmental and social assessments or

studies that affect the Project. Where regional or strategic assessments or studies are identified and assessed, these will be included in the summary of due diligence undertaken, including the Non-Technical summary

Complete a media search about the Project, Client, sector, country, etc. to determine the extent to which there has been relevant news coverage and, if so, whether any of the issues will require additional verification during the initial review and site visit. If no relevant issues are identified through this process the Consultant will include a statement to this effect within its results

Data and documentation are expected to be available in Serbian. This list is not exhaustive and the Consultant must be prepared to review, and also request, further documentation that does not appear above.Following the review of available data, the Consultant will visit the site, to obtain any supplemental information needed to complete the E&S Assessment (Section 3.2.1) and carry out the on-site activities necessary to fulfil the E&S Audit reporting requirements (Section 3.2.2).and carry out the following tasks:

Review the status of existing area and documents prepared or controls implemented to address environmental, social, labour, and health and safety issues by contractors and the MAFWM and/or PWMCs

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Review the potential for the presence of any historical environmental and social issues present.

Obtain an understanding of the site setting, in terms of environmental and social issues, to augment the understanding as provided in the background data. It is assumed that various maps and other visual documents will be available from personnel on site to assist on this understanding. This task should include a review of facilities in the proximity of the site and a review of residences, local businesses (including informal activities), public buildings, social/leisure spaces, forms of livelihood and communities located directly adjacent to or near the Project.

Conduct discussions with site personnel regarding on-site control and management of environmental and social issues.

Following completion of the data review/site visit the Consultant will deliver a summary of the key findings.

3.5.3. TASK 2: Environmental and Social Assessment

The Consultant will prepare a description of the EBRD financed component (see also chapter 3.1.1) including details of any alternatives1 considered for the project and information on neighbouring operations and activities. In accordance with EBRD PR1, paragraph 9, the Consultant will identify:(i) Any potentially significant environmental and social issues or risks associated with relevant

other activities or facilities, which are not part of the EBRD financed component but which may be directly or indirectly influenced by the EBRD financed component, exist solely because of the EBRD financed component or could present a risk to the EBRD financed component;

(ii) Cumulative impacts of the EBRD financed component in combination with impacts from other relevant past, present and reasonably foreseeable developments;

(iii) Unplanned but predictable activities enabled by the EBRD financed component that may occur later or at a different location; and

(iv) Environmental and social risks associated with the primary supply chains central to the Project’s core operational functions.

(a) Analysis of legal requirements

The Consultant will identify applicable local, regional and national environmental and social laws and regulatory requirements of the jurisdictions in which the EBRD financed component operates, including those laws implementing host country obligations under international law. The Consultant will analyse local permitting requirements and land acquisition/compensation procedures and compare them with the EBRD environmental and social requirements within a gap analysis in tabular format, presented to the structure of the EBRD PRs.The Consultant will review the compliance of the EBRD financed component with the applicable requirements, together with the status of any material permits or authorisations that are required.

(b) Baseline conditions

The ESDD will include a review of the aspects of the physical, biological and socio-economic environment likely to be affected by the proposed EBRD financed component. Indicative guidance on the contents of the overall assessment is provided in Attachment D.1.

1 Project alternatives to include: Zero (“no project”) alternative, siting and routing alternatives, infrastructure and traffic connection alternatives, design alternatives

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(c) Project Assessment

In accordance with the Bank’s ESP (2014), the Consultant will analyse the potential environmental and social impacts and risks of the EBRD financed component, as well as opportunities that the EBRD financed component may provide, including infrastructure development (e.g. water, wastewater, a heat and electricity distribution networks, transportation access) and other associated facilities, for which the EBRD financing is being sought.The E&S Assessment will include a review of the likely effects of the proposed EBRD financed component on the physical, biological and socio-economic environment to provide an identification and characterisation of potential E&S impacts, including beneficial (as well as adverse) impacts. This review will be structured to include all relevant stages of the EBRD financed component’s life, e.g: construction, operation and maintenance, and residual E&S impacts. The level of analysis and reporting will be commensurate with the risk magnitude of the identified issues. Indicative guidance on the contents of the overall assessment is provided in Attachment D. 1 .

(d) Management of impacts and issues

For each identified adverse future impact, issue and/or risk, the Consultant will propose measures to avoid, minimise, mitigate or compensate for them. In addition, the Consultant shall prepare and Environmental and Social Management Plan for the Project implementation phase (assumed to cover any construction and operation) in a format agreed with EBRD and the Client

EBRD PR Compliance AssessmentBased on the results of the ESDD, the Consultant shall evaluate the compliance status of the EBRD financed component with the EBRD PRs using the Compliance Summary format provided in Attachment D.2.

3.5.4. Task 3: Environmental and Social Audit

The E&S Audit is required to review the current and, to a limited extent, past operational performance of the Water Management Directorate (WMD) and its two Public Water Management Companies (PWMCs) existing operations and facilities in terms of their compliance with relevant national environmental laws and regulations and EBRD PRs, including relevant EU environmental standards and guidelines. Consultant should provide cross-reference with other sections of the due diligence, in particular the section 3.2, in case of any overlap.

Key issues to be covered under the E&S Audit may include, but not be limited to:

A review of the Company’s existing environmental and social management systems, policies and practices;

Organisational capacity and resources, including description of the number of personnel; number and percentage of women and men in total staff count as well as across all levels/categories;

Human Resources and employment (e.g. child labour, forced labour, and non-discrimination, workers’ organisations, contractor management, retrenchment and employment) policies;

A review of equal opportunities policies and practices in the Company; assessment of potential employment opportunities for under-represented groups in the workplace (i.e. women or men, people with the disabilities, different age groups, ethnic groups, etc.) and recommendations on what measures need to be made or what policies need to be revised to ensure equality of opportunity in the Company;

Occupational health and safety (local and national requirements, applicable EU/ international requirement and standards, key health and safety issues, control and major accident hazards, current health and safety monitoring programme, summary of regulatory compliance status, summary of health and safety expenditures, emergency response etc.);

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Pollution prevention measures available at both facilities and overall regulatory compliance with national requirements and pertinent EU standards including applicable Best Available Techniques and Best Available Techniques Reference Documents. In addition, this assessment will need to review compliance with best international practice as a benchmark against current operations and planned plant upgrades;

Industrial hygiene (including worker exposure, and rates of industrial diseases) and worker health and safety;

Use and management of hazardous substances (including chlorine and other chemicals handling);

Community health, safety and security as it relates to the Company’s existing operations; Major hazards assessment and management; environmental management plans in the event of

an incident, accident of spill both on land and water; Current company policy and practice in relation to avoidance of third party intrusion into

potentially hazardous areas (fences, security, personnel, others); Management of potentially hazardous works (including excavation works, work in confined

places, etc.); Traffic management;

Contractor management and oversight;

Waste management and waste minimisation; Noise and vibrations both during construction and operation of the Company’s facilities; Other construction related impacts (aerosol emission, dust, temporary severance to traffic,

water cuts, others); Overview of current Client’s policy and procedures regarding land acquisition (compensation

policy, consultation activities related to land acquisition including grievance management, if applicable);

Review the Client’s corporate procedures for assessing projects with potential biodiversity impact;

Identification of potential past environmental liabilities which may affect the Bank (e.g. soil and ground water contamination as a consequence of past and present operations);

Overview of the Client’s supply chain (e.g. suppliers of main materials and resources including energy; presence of women-owned businesses) and identification of relevant environmental, social, labour and/or reputation issues; and

Public interaction, including historical responsiveness to public comments, complaints and questions. The audit should also identify the Company’s main stakeholder groups and current stakeholder engagement activities in line with PR10.

Monitoring practices and results.

The Consultant will be guided by the relevant requirements of the Bank’s E&S Performance Requirements. The findings of the E&S Audit should also be considered in the completion of the PR compliance assessment.

3.5.5. Reporting

Upon completion of Tasks 1-3, the Consultant shall prepare the following reports of the assessment findings.

(a) Summary of key findings

On completion of the data review/site visit the Consultant will deliver a “Summary of Key Findings” to present the initial findings of the work to-date. This report will summarise the key issues that have been identified and, if necessary, will highlight the need for any additional studies, eg. in relation to resettlement, livelihood, retrenchment, biodiversity, etc. This document will be delivered by email or in presentation format.

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(b) ESDD Report

The Consultant will provide a concise but comprehensive report of the overall ESDD. The guidance for the report content provided in Attachment D.1 may be used to structure the report but the Consultant is expected to use their professional experience to determine the final contents.

(c) Land acquisition and compensation framework

The resettlement/livelihood restoration framework will provide a description of the required land take, the land acquisition process envisaged; associated physical or economic displacement impacts, gap analysis of Serbian legislation and PR5 and an action plan for the development of a full “Resettlement/Livelihood Restoration Plan” inclusive of any livelihood restoration measures as appropriate in line with both Serbian legislation and the EBRD PR5 requirements.

(d) Environmental and Social Action Plan (ESAP)

The Consultant will develop a comprehensive ESAP to address issues identified during the Environmental and Social Appraisal, covering both the EBRD financed component and Phase 1. The ESAP will focus on those issues that are required to bring the operations into compliance with the EBRD’s requirements and will be presented and sequenced by PRs. The Consultant will also inform EBRD and the Client about any material budget implications of ESAP items (although this information may not be required in the public domain). The required format the ESAP is given in Attachment D.3.

(e) Stakeholder Engagement Plan (SEP)

The Consultant will prepare a draft SEP in compliance with the PR10. The scope and level of detail of the SEP will be scaled to fit the needs of the EBRD financed component and the objectives of EBRD PR10, and will also take into account the stakeholder engagement and disclosure requirements of the GCF. Guidance for the contents of an SEP is provided in Attachment D.4.

(f) Non-Technical Summary (NTS)

The Consultant will prepare, in consultation with the Client, a concise, over-arching, standalone NTS. The NTS will be written in non-technical language and the Consultant will ensure that the NTS can be used to demonstrate compliance with the EBRD requirements. An indicative list of issues for the NTS is given in Attachment D.5.

(g) Environmental and Social Management Plan

The Consultant shall prepare an environmental and social management plan for the Project implementation phase (assumed to cover any construction and operation) in a format agreed with EBRD and the Client. This shall include roles and responsibilities and timing for the implementation of mitigation measures, issue specific mitigations and specific actions to ensure the effectiveness of the mitigations, monitoring and reporting.

3.6 Knowledge platforms

In order to ensure links into emerging international online project information platforms for the infrastructure sector, the Consultant will facilitate the upload and updating of non-confidential project information on-line via:

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International Infrastructure Support System (http://public.sif-iiss.org/) - an online cloud based project preparation and management tool, which provides templates for infrastructure projects, with the aim of improving the quality, consistency and transparency of project preparation and designed to speed up the delivery of infrastructure in the public sector across the developing world.

Global ViP (https://www.gvip.io/mygvip) – an online public utility tool which uses social networking technology to tap into a large pool of sector experts who can be consulted to improve project design , hence providing infrastructure project decision-makers, public and private sector users just-in-time access to expertise worldwide. GViP is aimed to address the issue of project development and project preparation by allowing project developers (public and private) rapid, accurate, access to global expertise.

The overall aim is to disseminate EBRD project information on-line and ultimately to increase project quality, reduce project development costs, and reduce project preparation time. On this task, the Consultant will report to Meran Lukic (email: lukicm@ebrd.com). Further information on IISS and GViP can be provided to the Consultant at the start of the assignment, including User Guides on these Platforms.

3.7 Project profile

The Consultant will produce a 2-page Project and EBRD financed component Brief outlining the project background, description, context and outcomes of the Project – to be used by the Bank in its reporting to other stakeholders internally and externally. An example Project Brief can be provided to the Consultant at the start of the assignment.

4. IMPLEMENTATION ARRANGEMENTS AND DELIVERABLES

4.1 Schedule The duration of the assignment is expected to be 12 weeks. The Consultant will report to the EBRD on all aspects of the assignment whilst liaising with representatives of MAFWM as required.

4.2 Arrangements

MAFWM and PWMCs are expected to: - designate senior officials to be the primary contact persons with specific responsibility for

assisting the Consultant and co-ordinating activities; - make available all of their records, plans, reports, designs and other documents as appropriate,

but it will be the responsibility of the Consultant to translate these documents, if necessary; - provide access to all of their facilities and employees for interviews or assistance relative to

an understanding of the functioning of system facilities;

The Consultant will be responsible for paying for all international telephone calls, office supplies and external printing. The Consultant will pay for all local transportation required by the Consultant’s staff throughout the duration of the assignment.

The Consultant will be responsible for providing suitably qualified interpreters/translators to work with their staff.

4.3 Deliverables Unless otherwise agreed with the Bank, the Consultant will produce in the course of the assignment the following reports:

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Inception Report: Within 6 weeks of the assignment commencement, and following the first site visit, initial data review and initial opinion as to a project proposal, the Consultant will submit to the Bank an Inception Report presenting the initial findings, with an emphasis on findings having an impact on the time schedule and factors affecting these Terms of Reference. The Inception report will include the EBRD financed component EIRR, the justification of capital grant components, the Terms of Reference for the different TCs, the procurement plan.

Draft ESDD report: Within 10 weeks of the assignment commencement, together the following drafts: Resettlement/Livelihood Restoration Framework, ESAP, ESMP, NTS and SEP in English and Serbian

Draft Final Report: Within 12 weeks of the assignment commencement, the Consultant will submit a draft Final Report. The Final Report will include all deliverables as described in the Scope of Work and include: (i) an assessment of the existing situation and facilities; (ii) an outline of a long term investment strategy; (iii) proposals for components to be included in the EBRD financed component with cost estimates; (iv) an overview of cost savings to be achieved after implementation of the Project and EBRD financed component, by component; (v) financial model of the Project and of the EBRD financed component; (vi) a procurement strategy and procurement plan; (vii) the scope of work for the EBRD financed component implementation team; (viii) a GET assessment report, including a preliminary table for climate resilience outcomes and resource efficiency measures; and (ix) a summary of the ESDD with specific reference to the ESAP. The Consultant will distribute the draft Final Report in English and Serbian to the Bank and to MAFWM for comments and will organise a joint meeting to present the draft Final Report (“Presentation”) with all parties at a mutually suitable location within two weeks after distribution of the Report.

Final Report: To be submitted within two weeks after the Presentation date by the Consultant, elaborating and reflecting all comments addressed during the Presentation, and including summary information on the Project and on the EBRD financed component.

Three copies of all reports in English/Serbian are required; both versions will also be provided to the Bank in electronic-readable format, in both Word and PDF. Supporting data in the national language in the appendices need not be translated for English versions of the documents.

5. CONSULTANT’S PROFILE

The Consultant will ensure that appropriately qualified experts are available, as required, for each of the different tasks outlined above. It is expected that the assignment will be led by an appropriately qualified Team Leader, accompanied by both key and supporting experts. Based on the fields of expertise and the tasks mentioned above, it is that the Consultant’s team will consist at least of the following key experts:

1. Team Leader – expert in irrigation and water supply with preferably: - At least B.Sc. degree in civil engineering or similar; - Preferably 15 years’ experience in construction and/or operation of infrastructure in the Project

sector;- Preferably 8 years of experience as project manager or team leader for similar projects; - Experience of similar assignments in Serbia and/or South-Eastern Europe.- Fluency in English and Serbian.

2. Agricultural economist , with preferably: - B.Sc. degree in Agriculture or similar;- Preferably 15 years’ in-depth understanding of the economics of farming in the region,

preferably in Serbia or similar;- 10 years of relevant experience in the areas of natural monopolies regulation;- Knowledge of Serbian water and irrigation tariff legislation;- Knowledge of the public financing and modelling.

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3. Civil (irrigation) engineering expert , with preferably: - At least B.Sc. degree in civil engineering or similar;- 10 years’ experience in experience of water management, including with water retaining

embankment structures;- Knowledge of designing, construction, permitting and other requirements in line with local laws

and procedures.4. Environmental expert , with preferably:

- B.Sc. degree in biology, environment or similar;- Specific experience in environmental requirements according to local law;- Practical knowledge and understanding of EBRD’s environmental requirements (or IFIs’ with

similar requirements) and conducted due diligence;- Past experience of assistance in successful implementation of EBRD’s (or another IFIs’)

environmental requirements is an asset. 5. Social expert , with preferably:

- Preferably B.Sc. degree (or equivalent qualification) in relevant sector; - Preferably 5 years’ experience in similar projects within the required sector;- Practical knowledge and understanding of EBRD’s social requirements (or IFIs’ with similar

requirements) and conducted due diligence;- Past experience of assistance in successful implementation of EBRD’s (or another IFIs’) social

requirements is an asset;- Experience of working on gender and agricultural water management/multiple uses of water

supply issues is considered an advantage.6. Climate change expert , with preferably:

- 10 years’ experience of assessing climate change impacts and recommending climate resilience responses.

7. Contract/procurement expert , with preferably: - B.Sc. degree in civil engineering or similar;- 5 years’ experience in public contracting and procurement for infrastructure in the Project

sector;- Theoretical and practical knowledge and experience of IFI (especially EBRD, WB and/or ADB)

procurement rules;- Theoretical and practical knowledge and experience of FIDIC conditions of contract.

The Consultant to note that most (if not all) of existing documents are in Serbian. Therefore, it would be preferable that the key experts are fluent in Serbian to ensure consistency and quality and timeliness of deliverables. Consultant will also need to ensure that their team includes expertise related to climate change and resource efficiency.

The Consultant is encouraged to include local Young Professionals (“YP”) in the team when appropriate. A YP should be a recently graduated Serbian national, with at least a Master’s degree in a field relevant to the Project. The objective is for practical knowledge transfer to occur between experienced professional consultants and the YP. This will be an opportunity for the YP to gain real-world sector experience, acting as a junior member of an international consulting team.

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List of Attachments:

Attachment A: Guidance on integrating climate change adaptation into project development

Attachment B: Standard measuring indicators and SRI impact indicators

Attachment D: Environmental and Social Due Diligence

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Attachment A: Guidance on integrating climate change adaptation into project development

Introduction

1. EBRD is committed to promoting climate resilience through its operations. EBRD considers that the assessment of climate change risks and the integration of appropriate adaptation measures in order to promote climate resilience are essential steps in project development. This will ensure that their investments are sustainable and that they support assets, services and businesses that are resilient to the impacts and consequences of current and projected future climatic conditions. This guidance note outlines a framework for the integration of adaptation measures in order to promote the climate resilience of projects and their economic, social and environmental benefits.

General principles

2. Initiate a climate change adaptation assessment at an early stage of project development so that appropriate adaptation measures can be built into project planning, design, operation and maintenance in order to promote climate resilience. Projects should be screened for climate risks, vulnerabilities and opportunities as early as possible in the project cycle. Avoid as far as possible ‘end of pipe’ climate resilience measures that are added on to project design at a late stage, as these are often more costly and less effective. In some cases, an early assessment leads to a more climate resilient outcome by informing fundamental decisions around project location or infrastructure type and technology options (e.g. avoid floodplain altogether).

3. Integrate the climate change adaptation assessment into appropriate project development steps, which may include, inter alia, strategies and planning, pre-feasibility and feasibility studies, audits, technical assessments or environmental & social due diligence, e.g. environmental and social impact assessments (ESIAs).

Assessment scoping

4. Establish clear project boundaries that take into account the assets and systems being financed while also carefully accommodating wider ‘outside the fence’ boundaries as needed, for example infrastructure, systems, communities, institutions or ecosystems that directly affect, or are affected by the performance or sustainability of the project (e.g. power supply, transport links, lake providing cooling water). These project boundaries should define the scope of the climate change adaptation assessment.

5. Establish an appropriate timescale over which climate change impacts are assessed. This should match the intended lifespan of the assets, systems or institutions being financed under the project. In some cases it may be appropriate to use observed data plus more than one time horizon to understand shorter-term and longer-term climate change implications, bearing in mind that the longer the time-span, the greater the uncertainty. This should consider planning, construction, financing, operational and design life cycles as well as decommissioning and/or removal or replacement. In order to assess the climate change signal above observed climatic variability, the characteristics of future climate should be assessed over a period of at least 20 to 30 years (e.g. near future: 2021-2050; far future: 2070-2099). A baseline scenario of a suitable historical reference period should also be used.

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6. Identify preliminary priority vulnerabilities for the climate change adaptation assessment focused on key climate change risks that could significantly impair, or potentials that could enhance the performance of the project/system. This step should also include learning from past project experience of weather and climate impacts, including challenges faced during responses and recovery to the impacts of climate-related events. Scoping may include benchmarking comparable investments/infrastructure.

Main assessment

Information and knowledge gathering

7. Set a clear context of vulnerability to climate variability and change using a robust evidence base, which may include using existing, authoritative and preferably peer-reviewed analyses2 or reports such as the Intergovernmental Panel on Climate Change Fifth Assessment Report (IPCC AR5), National Adaptation Strategies and/or Action Plans (NAS/NAPs), National Adaptation Programmes of Action (NAPAs), Nationally Determined Contributions (NDCs), Strategic Programmes for Climate Resilience (SPCRs), and other relevant adaptation strategies and policies, and academic journals. An initial review at the national level should be followed by a more detailed assessment focusing on the project area.

8. Explore the full envelope of climate change uncertainties by drawing on a wide range of climate change model projections, including a broad range of emissions scenarios, general circulation models (GCM), and downscaled data where appropriate and available, in order to understand the implications of uncertainties. For projects or assets with longer lifespans where emissions uncertainty can be important, the assessment should explore the consequences of a range of high, medium and low GHG emissions scenarios (e.g. A2, A1B and B1) or representative concentration pathways (e.g. RCP2.6, RCP4.5, RCP8.5). In general, the longer the lifespan of the asset, the wider the range of scenarios that should be used. Climate change uncertainties should be presented and interpreted in a transparent way, taking into account any underlying model uncertainties, data weaknesses or spatial scale limitations. Impact modelling using the outputs of climate models (e.g. hydrological models) should adopt the same explicit approach towards presenting uncertainties. Where appropriate, extreme or peak climate-related events (e.g. peak temperatures, storms, floods) should be considered and explored (subject to careful assessment to take account of the potentially strong bias of high temporal resolution data), as well as projections of mean climate conditions (e.g. mean temperatures).

Project Planning and Design

9. Articulate a clear and direct link between the context of climate vulnerability and the planning and design of the project, by mapping the vulnerabilities against the specific components, functions and objectives of the project, and the assets, systems or institutions being financed or affected.

10. Carry out a comprehensive assessment of climate risks based on the identified project vulnerabilities, the exposure of its components to projected climate hazards, and the probability of those hazards to materialise. This should identify the key risks to be addressed and the gains to be

2 Robust and authoritative climate change information sources should always be used, of which a non-exhaustive list is shown in the Annex.

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expected in terms of reduced vulnerability and/or increased resilience. Priority climate risks should be prioritised in a way that takes into account potential impacts and probabilities:

• Mapping of risks: where, how and why• Characterisation of the risks: tangible, intangible• Time-space value: where and/or when a given risk represents the highest threat• Economic evaluation: expected damages to the project• Decision matrix: determine risk management actions and priorities

11. Use the results of the climate risk assessment to inform project planning and design in order to identify and appraise adaptation options for tangible improvements in the climate resilience of the systems, assets and infrastructure being financed under the project. This requires the use of robust climate change information (as outlined above) to inform better decisions in the design and appraisal of such investments, for example through technology selection (e.g. wet process vs. dry process; water cooling vs. air cooling), or modifications to infrastructure design specifications (e.g. altered spillway capacity or quayside height), or by implementing a flexible design that can be adapted at a low or moderate cost.

12. Consider both structural and non-structural adaptation measures in response to the project-specific climate risks identified. For example, structural measures may include modifications to the design or specification of physical assets and infrastructure, or the adoption of alternative or improved technologies. Examples of non-structural measures may include improved monitoring or emergency response programmes, capacity building, staff training and skills transfer activities, the development of strategic or corporate climate risk assessment and management frameworks (based on a thorough assessment of institutional capacities and development needs), or financial solutions such as insurance against supply chain failure. A combined method may be used to ensure project readiness for enhancing resilience at a later stage. In such a case there may be minimal structural modifications at the outset, with the project designed in such a way that facilitates more rapid action at a later stage, if and when necessary.

13. Ensure that adaptation recommendations are as specific as possible, in order to identify the specific components, equipment or attributes of the assets or systems being financed that are critical for climate resilience. Wherever possible, identify specific and quantifiable performance standards or thresholds that can serve as benchmarks for ensuring that critical assets and systems are resilient to the projected range of future climate conditions, and allows performance monitoring over time. Clearly state the targeted benefit of each adaptation measure and suggest suitable (e.g. SMART – Specific, Measurable, Achievable, Realistic and Timely) project-level indicators, which should be gender-disaggregated where appropriate.

14. Use established ‘international best practice’ industry standards or guidance on adaptation wherever possible and appropriate. This may include, for example, standards/guidance on adaptation developed by specific industry associations (e.g. buildings, ports, hydropower etc.), or by national or international standards associations. As much of this kind of guidance has been developed in OECD countries, it may be necessary to make adjustments in order to reflect conditions experienced in developing countries and emerging economies.

Explaining Costs and Benefits

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15. Ensure that the costs (if any) associated with adaptation measures are clearly explained so that they can be expressed in monetary terms. The costs should be presented in a cost table, giving best estimates of the costs of measures and/or assets at a level of detail appropriate for the project, based on currently available information. This may be necessary in some cases in order to reach agreement with partner organisations on the inclusion of climate resilience measures in project design and finance agreements. This should acknowledge that in some cases, such as short lived assets, the most acceptable course of action may be not to adopt any specific adaptation measures and simply accept some damages/losses, or alternatively insure against such damage/losses.

16. Ensure that the expected benefits of recommended adaptation measures are clearly explained. Such benefits may be estimated in terms of projected improvements in system performance taking into account climate change impacts, estimated resource savings taking into account projected future resource availability or costs, or avoided damages. This may also include potential relevant financial incentives where appropriate. These benefits should be expressed in financial terms (EUR and local currency).

17. Analyse the estimated costs and benefits of recommended adaptation measures. Taking into account the costs and benefits of recommended adaptation measures, the financial and economic viability of the measures shall be examined and confirmed. This shall notably include an annual cash-flow covering a reasonable timespan and culminating in the presentation of applicable financial indicators such as net present value (NPV), internal rate of return (IRR) or cost-benefit ratio (CBR). Where financial metrics cannot be reliably calculated or used, semi-quantitative CBR should be used.

Implementation, Operations and Monitoring

18. Present the final adaptation recommendations in a form that can be integrated into financing agreements and detailed project design documents. Financing institutions may need to covenant climate resilience commitments into finance agreements in order for them to have meaningful influence over the use of project finance. Management recommendations should also be presented in a form that can be integrated into tender documentation or operations manuals. Where appropriate, priorities for technical cooperation for capacity building or skills transfer should be included in response to identified adaptation needs. These recommendations should also consider the long term sustainability of a project, with consideration of what will happen after project completion, in order to secure the transition towards a self-sustaining phase beyond project closure.

19. Recommend effective monitoring and evaluation measures, through construction and operation phases, to assess both delivery of adaptation features and their effectiveness. Monitoring indicators should be gender disaggregated where appropriate.

Communicating Findings

20. Ensure that findings and recommendations address both the climate resilience of the project and the system or network within which it operates, even if outside the direct control of the project partner. For example, a climate change adaptation assessment of a transport project may result in specific changes to the project, in addition to further recommendations for the wider transport network within which the project sits. The identification of potential cascading or third party risks should be made clear to potentially affected parties and in a transparent way.

21. Communicate climate risk assessment findings and adaptation recommendations in a transparent way that allows them to be used in decision making about the project and its implementation, which may involve stakeholders and public consultation. This may require an appropriate level of explanation and substantiation of the recommendations to the client/partner and other stakeholders, as well as for the financing institution. Communication should focus on impacts

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(risks) and recommended actions, rather than focusing on the scale and nature of change which risks reversion to a debate on climate science rather than a focus on investment and response. These should be gender disaggregated where appropriate.

ANNEX: Examples of authoritative climate change information sources

Climate Service Centre Germany (http://www.climate-service-center.de/index.html.en) Climate Service Centre Germany & KfW’s Climate Fact Sheets (http://www.climate-service-

center.de/036238/index_0036238.html.en) Royal Netherland Meteorological Institute (http://climexp.knmi.nl) UK Met Office (http://www.metoffice.gov.uk/precis/) European Climate Adaptation Platform – Climate-ADAPT (http://climate-adapt.eea.europa.eu) European Commission Joint Research Centre (https://ec.europa.eu/jrc/en/research-topic/climate-

change) ClimateWizard synthesis of a broad range of climate models (http://www.climatewizard.org/) IPCC Fifth Assessment Report WG I (https://www.ipcc.ch/report/ar5/wg1/) IPCC Data Distribution Centre (www.ipcc-data.org/maps/) UNDP climate change country profiles

(http://www.geog.ox.ac.uk/research/climate/projects/undp-cp/) World Bank climate knowledge portal (http://sdwebx.worldbank.org/climateportal/)

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Attachment B: Standard measuring indicators and SRI impact indicators

Standard measuring indicators:

Sector Indicator Data point to be collected Projected after implementation

completion*

Water Supply

Total population benefitting from access to irrigation water.

Number of farmers connected to improved access to irrigation water.

Annual reduction in tonnes of CO2 equivalent derived from the lowering of water losses system-wide.

Average (for sector) kwh used to produce 1 m3 of watermultiplied with,amount of m3 of water losses eliminatedmultiplied with,average tons of CO2 generated by energy generation in the country.

Annual m3 irrigation water produced.

M2 of fields connected to improved access to irrigation water multiplied by average consumption of water per m2 in m3/year.

Drainage

Total population benefitting from access to drainage services.

Number of farmers with improved access to drainage services.

Annual m3 of drainage treated.

Total m3/year of drainage treated through improved treatment plant and/or total m3/year of drainage supplied to existing treatment plant through improved network.

* measured two years after projected full loan disbursement

SRI impact indicators (as applicable):SRI impact indicator

Unit Data point to be collected

Primary energy saved

GJ/yr Project energy use compared to baseline3 energy use.Primary energy includes:

1. Direct use of fossil fuels2. Direct use of biomass.3. Use of electricity, multiplied by a loss factor to take into account

country average generation efficiencies and electricity grid losses4

3 The baseline is defined as the expected conditions without the project two years after full loan disbursement. The baseline is compared to the conditions projected with implemented project two years after full loan disbursement.4 For example, with an average electricity generation efficiency of 40% and grid losses of 7%, the primary energy use (MWh) is 2.7 x the direct electricity use (MWh).

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CO2 emissions reduced

ton CO2e/yr

Project CO2 emissions compared to baseline CO2 emissions.CO2 emissions include:

1. Emissions as a result of direct use of fossil fuels2. Indirect emissions as a result of the use of electricity5

3. Emissions of other Greenhouse gases (in particular methane6) expressed in CO2 equivalents.

Water saved m3/yr Project water use compared to baseline water use. Water savings must be determined for the following project activities:

1. Water recycling projects that recover wastewater streams for reuse or alternative use.

2. Application of technology or management actions that lead to effluent water quality improvements in regions with water scarcity7

3. Water loss prevention and water demand managementMaterial savings ton/yr Material use compared to baseline material use. Material savings must be

determined for project activities aimed atwaste minimisation:

1. Minimisation of waste streams by integrated measures (i.e. improvement of existing installations, processes or procedures/management)

2. Waste recycling projects that reuse waste as inputs into new products or as a resource

5 The CO2 emissions as a result of the use of electricity are determined by multiplying the use of electricity (MWh) with the country specific grid emission factor (ton CO2/ MWh) in line with the joint MDB list of grid emission factors.

6 Tons of methane emissions (ton CH4) can be converted to tons of CO2 equivalents (ton CO2e) by applying the a factor of 25 (ton CO2e/ton CH4)7 Qualifying for ‘water saved’: treated waste water with an effluent quality at or exceeding internationally accepted effluent water quality standards.

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Attachment D: Environmental and Social Due Diligence

ATTACHMENT D.1 : SAMPLE REPORT FORMAT FOR AN ESDD REPORT

Note: The following is an indicative list of issues for possible inclusion in an ESDD report for a greenfield Project. The Consultant is expected to use its professional judgement to determine what issues (either listed below or additional) are relevant to the Project. Issues which are not relevant to this project should be covered by a short statement that they have been considered but do not apply in this case.

Executive SummaryA concise summary description of the Project, its rationale, the existing setting, significant environmental and social impacts, recommended mitigation and enhancement measures, monitoring proposals, and the extent of the Client’s commitment to these recommendations and proposals.1 | Project DescriptionPrecise description of the Project within its geographical, environmental and socio-economic context. This should include information on whether and how the Project is part of a wider development plan/programme. A systematic comparison of feasible alternatives to the project in terms of location, project technology or design in terms of potential environmental and social impacts. This should include the ‘do-nothing’ option.2 | Legal RequirementsOutline of the policy, legal and administrative context of the ESIA summarising the environmental and social and project approval requirements of the Bank, co-financiers and applicable regional/global conventions or agreements. The timeframe for public consultation, project appraisal and implementation should be outlined.

Applicable IFI Environmental and Social Assessment procedures Host Country, Regional and International Regulatory Framework, standards and guidelines,

treaties applicable Approach to benchmarking

3 | Baseline ConditionsA description of relevant aspects of the physical and natural environment and socio-economic conditions in areas affected by the project to include, inter alia:

Air emissions and noise; Biological and ecological resources (fauna, flora, biodiversity, protected species, critical habitats,

ecosystems); Climatic factors and climate change (e.g. greenhouse gas emissions, including from land use,

land use change and forestry, and sectors of population more affected by climate change); Cultural heritage, including architectural and archaeological heritage; Geomorphology and geology; Land (past and current use, permanent or temporary acquisition); Land use patterns Landscape and visual aspects; and, Material assets; Mitigation potential and impacts relevant to adaptation; Other social issues: community, settlement patterns and residential properties, vulnerable groups Public and / or site specific transportation system; Socio-economic status of the population (disaggregated by gender, age, ethnicity, and other social

characteristics); Soil (organic matter, erosion, compaction, sealing); Stakeholder engagement practices Water (accessibility, quantity and quality, surface and groundwater) and waste water

management; Worker and public health and safety;

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4 | Potential ImpactsIdentification of the potential environmental and social impacts that could be associated with the Project including those of an indirect and cumulative nature. Impacts which are unlikely to arise or be insignificant should be recorded, together with the rationale for why they are considered to be unlikely or insignificant. Potential impacts must be considered at the following levels:

Local impacts National impacts Regional/Global impacts

5 | Characterisation of Impacts and OpportunitiesIdentification and characterisation of positive and negative environmental and social impacts in terms of magnitude, significance, reversibility, extent and duration. The possibility for cumulative impacts is to be considered. Quantitative data must be employed to the greatest extent possible. The chapter should also identify opportunities for environmental and social enhancement and identify key uncertainties and data gaps. The following Project stages must be considered in this evaluation where appropriate:

Construction phase Operation and maintenance Closure and decommissioning Residual environmental and social impacts

6 | Management of Impacts and Issues An outline of the feasible cost-effective measures to avoid, minimise, mitigate or compensate for environmental and social impacts to acceptable levels and address other environmental and social issues; such as the need for worker health and safety improvements, inter-agency coordination, community involvement, institutional strengthening or training within the executing agency/ governmental agencies/Client or at the community level. Additionally, an outline of any measures that would enhance environmental and social aspects within the area affected by the Project and characterisation of the nature of any residual environmental and social impacts or issues that have not been addressed. A description of the financial provisions for potential risks (for example escrow accounts and insurance cover to provide for inter alia abandonment and decommissioning, site remediation and oil spills and other emergencies). The following stages must be considered where appropriate:

Construction Implementation and maintenance Closure and decommissioning Residual environmental and social impacts

7 | Monitoring and SupervisionA description of how environmental and social impacts and issues will be monitored and managed in practice; including an indication of how the Project will be supervised by lenders and governmental agencies. Estimates should be provided for capital expenditure and operation and maintenance costs where possible. The following stages must be considered where appropriate:

Construction Implementation and maintenance Closure and decommissioning

8 | Mitigation and Management PlanA record of all measures required to address environmental and social impacts and issues as well as monitoring and supervisory activities associated with these should be consolidated in tabular form. This should also indicate institutional responsibilities, timeframes and associated costs.Appendices

Names of those responsible for preparing the ESDD References and sources of information Records of public meetings and consultations held Supporting technical data

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EBRD Compliance Summary Table (see Annex 2)

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ATTACHMENT D.2 : ENVIRONMENTAL AND SOCIAL ASSESSMENT: COMPLIANCE SUMMARY TABLE

IntroductionThe Compliance Summary provides a systematic review of project compliance with the EBRD Environmental and Social Policy, as defined through the applicable Performance Requirements (PRs). Scope of compliance is all PRs applicable to non-FI projects. The review is intended to provide a baseline against which to judge future performance of projects through the annual environmental and social reporting process.Between 2 and 10 indicators are identified for each of the applicable PRs: 1, 2, 3, 4, 5, 6, 7, 8 and 10.GuidanceFor all PRs (Indicators with whole number references) provide a summary of overall compliance with the PR. Justification for any derogation from a PR should be summarised and supporting documents referenced.For each indicator within a PR, please complete the 3 steps below:

1. Decide whether the indicator is applicable. For Category A and B projects the starting point is that all indicators are applicable unless the project has no significant aspects relevant to the indicator (i.e. no risks), in which case the indicator should be scored "NA" and a brief summary of the reason given. For Category C projects the starting point is all indicators are NA unless the project has a significant aspect relevant to the indicator (i.e. there is a material risk).

2. Decide whether an opinion is possible. If not (for example if the indicator will apply, but it is too early in the project) score as "NOP" and provide a brief summary of why. Where lack of opinion represents a material omission to the review refer to where this is addressed in the report and summarise any recommendations.

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3. Score the indicator as follows and provide brief justification.

ECExceeding Compliance:The project has gone beyond the expectations of EBRD’s PR requirements. EBRD should be able to use projects rated EC as a role model for positive Environmental and Social effects.

FCFully Compliant:The project is fully in compliance with EBRD’s requirements, and EU and local environmental, health and safety policies and guidelines.

PCPartial Compliance:The project is not in full compliance with EBRD’s requirements, but has systems, processes or mitigation measure in place which are working towards addressing the deficiencies.

MNMaterial Non-compliance:The project is not in material compliance with EBRD’s requirements, and the systems, processes and mitigation measures in place are not working towards addressing the deficiencies.

4. Comments/Issues: Provide a brief commentary on the relevance of this requirement for the project and an explanation of the chosen score.

5. Actions Required: Where applicable, briefly describe any actions required by the client to achieve full compliance with each requirement. Where a relevant action is included in the ESAP for this project, please provide a reference to the ESAP.

6. PR Summary: Provide an overall summary against the PR, using the above compliance definitions with supporting commentary. In some cases it may be sufficient to address a PR at summary level only, depending on Stage 1 above.

Note: The Material Non-compliance score (at both Indicator and PR level) has significant implications for Project approval and requires particular care. In judging whether the measures sufficiently address deficiencies the consultant should consider in a structured way both the level of residual (post-approval) risk and the level of confidence that the Project can successfully bring the issue into compliance with the Policy through the ESAP. The table below illustrates the approach to be taken.

RiskHigh PC MN MN

Medium PC PC MNLow FC PC PC

High Medium LowConfidence

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KPI Ref. Performance Requirement Score Comments/ Issues Actions Required ESAP

Ref.

1 Assessment and Management of Environmental and Social Impacts and Issues

Summary:

1.1 Environmental and Social Assessment

1.2 Environmental and Social Management Systems

1.3 Environmental and Social Policy8

1.4 Environmental and Social Management Plan

1.5 Organisational Capacity and Commitment

1.6 Supply Chain Management

1.7 Project Monitoring and Reporting9

2 Labour and Working Conditions

Summary:

2.1 Human Resource Policies and Working Relationships

2.2 Child and Forced Labour

2.3 Non-Discrimination and Equal Opportunity

2.4 Workers Organizations

2.5 Wages, benefits, and conditions of work and accommodation

8 Where the project represents a substantial extension to the client activities, confirm that Policy and supporting management systems and plans are appropriate for the new activities.9 At appraisal stage there will be limited information. Compliance assessment should address specific plans for monitoring and reporting (against for example ESAP requirements) and also consider whether there is evidence of weak monitoring/reporting by client on other relevant projects - which may reduce confidence in future performance.

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KPI Ref. Performance Requirement Score Comments/ Issues Actions Required ESAP

Ref.

2.6 Retrenchment10

2.7 Grievance Mechanism

2.8 Non-Employee Workers

2.9 Supply Chain

2.10 Security Personnel Requirements

3Resource Efficiency and Pollution Prevention and ControlNB. Appraisal should carefully consider (and state) what regulations or standards have been applied to compliance assessment (eg EU, National, Sector Best Practice). Assessments should address consideration of the performance of alternative techniques.

Summary:

3.1 Resource Efficiency

3.2 Pollution Prevention and Control - Air emissions

3.3 Pollution Prevention and Control - Waste waters

3.4 Greenhouse Gases11

3.5 Water

3.6 Wastes

3.7 Hazardous Substances and Materials

4 Health and Safety

Summary:

4.1 Occupational Health and Safety

10 Will not be applicable to many projects at appraisal stage. However evidence, within the last 3 years of client approach to retrenchment which is not compatible with the Policy should be taken into consideration.11 Particular attention should be given to client demonstration of consideration of alternatives. Projects expected annually to produce more than 25,000 tonnes of Co2 equivalent should provide an emission inventory and plans for annual reporting.

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KPI Ref. Performance Requirement Score Comments/ Issues Actions Required ESAP

Ref.

4.2 Community Health and Safety

4.3 Infrastructure, Building, and Equipment Design and Safety

4.4 Hazardous Materials Safety

4.5 Product and Services Safety

4.6 Traffic and Road Safety

4.7 Natural Hazards

4.8 Exposure to Disease

4.9 Emergency Preparedness and Response

5 Land Acquisition, Involuntary Resettlement and Economic Displacement

Summary:

5.1 Avoid or minimise displacement

5.2 Consultation

5.3 Compensation for displaced persons

5.4 Grievance mechanism

5.5 RAP/LRP documentation

5.6 RAP/LRP implementation

5.7 Monitoring

6 Biodiversity and Living Natural Resources

Summary:

6.1 Assessment of Biodiversity and Living Natural Resources

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KPI Ref. Performance Requirement Score Comments/ Issues Actions Required ESAP

Ref.

6.2 Conservation of Biodiversity

6.3 Sustainable Management of Living Natural Resources

7 Indigenous People

Summary:

7.1 Indigenous People Assessment

7.2 Adverse Effects Avoidance and Indigenous Peoples Development Plan

7.3 Information Disclosure, Meaningful Consultation and Informed Participation

7.4 Grievance Mechanism and Prevention of Ethnically Based Discrimination

7.5 Compensation and Benefit-Sharing

7.6 Impacts/Relocation on Traditional or Customary Lands and Cultural Heritage

8 Cultural Heritage

Summary:

8.1 Assessment and Management of Impacts on Cultural Heritage

8.2 Consultation with affected communities and other stakeholders

8.3 Project use of Cultural Heritage

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KPI Ref. Performance Requirement Score Comments/ Issues Actions Required ESAP

Ref.

10 Information Disclosure and Stakeholder Engagement

Summary:

10.1 Stakeholder Engagement Plan

10.2 Operational Grievance Mechanism

Overall ComplianceNational Environmental, Social, Health and Safety Requirements

EU Environmental, Social, Health and Safety Requirements

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ATTACHMENT D.3 : ENVIRONMENTAL AND SOCIAL ACTION PLAN TEMPLATE

No. ActionEnvironmental &

Social Risks(Liability/Benefits)

Requirement(Legislative,

EBRD PR, Best Practice)

Resources, Investment Needs,

ResponsibilityTimetable

Target and Evaluation Criteria

for Successful Implementation

Status

PR1 Assessment and Management of Environmental and Social Impacts and Issues

1.1 Develop and implement an EMS

Optimisation of environmental management though a formalised system. Provide resources for training and monitoring of emissions

EBRD PR1Voluntary and best practice

Own resources, external consultantsCostAssign responsibilities

20xx Develop and implement an EMSAttain ISO 14001 or equivalent certificationAnnual EHS Report to the Bank

PR2 Labour and Working Conditions

2.1

PR3 Resource Efficiency and Pollution Prevention and Control

3.1

PR4 Health and Safety

4.1

PR5 Land Acquisition, Involuntary Resettlement and Economic Displacement

5.1

PR6 Biodiversity and Living Natural Resources

6.1

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No. ActionEnvironmental &

Social Risks(Liability/Benefits)

Requirement(Legislative,

EBRD PR, Best Practice)

Resources, Investment Needs,

ResponsibilityTimetable

Target and Evaluation Criteria

for Successful Implementation

Status

PR7 Indigenous People

7.1

PR8 Cultural Heritage

8.1

PR10 Information Disclosure and Stakeholder Engagement

10.1

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ATTACHMENT D.4 : GUIDANCE FOR A STAKEHOLDER ENGAGEMENT PLAN

The following is an indicative list of issues for possible inclusion in a Stakeholder Engagement Plan. The Consultant is expected to use its professional judgement to determine what issues (either listed below or additional) are relevant to the Project.

A Stakeholder Engagement Plan will need to: Briefly identify the Project location and areas subject to impact (e.g., list of communities) Record what the Project is legally required to do regarding disclosure and consultation Identify all stakeholders, including stakeholder maps (if relevant) Identify any specific groups who might be considered vulnerable or need more support in the

consultation process, e.g. because of their level of literacy, gender, socio-economic level, ethnicity/language, or location (e.g., proximity of the project to school, hospital, etc.). For each identified group, specify how meaningful consultation will be undertaken

Report on any previous consultation and disclosure activities Define which documents will be released, including a schedule, and in what language(s) Define where documents will be available (physical and online addresses) , e.g. provide

names of specific newspapers, bulletin board locations, etc. Define how people will be notified of the document availability State the beginning and end dates of the consultation Provide a table or list of meetings, activities or opportunities for comment. If locations/dates

are not yet known, state how people will be informed of the dates State who/where should comments be sent to, what will happen to them and how people will

be advised of the outcomes Define how grievances will be handled (including a specific public grievance process) Define the monitoring and reporting activities for the stakeholder engagement process Define the responsibilities for delivering the stakeholder engagement process

The SEP should be concise and not exceed 15 pages in length, excluding annexes.

Please also see guidance note: http://www.ebrd.com/downloads/about/sustainability/grievance-mechanism.pdf

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ATTACHMENT D.5 : LIST OF INDICATIVE ISSUES FOR A NON-TECHNICAL SUMMARY

The following is a list of indicative issues for possible inclusion in a Non-Technical Summary. The Consultant is expected to use its professional judgement to determine what issues (either listed below or additional) are relevant to the Project.

Non-Technical Executive Summary 1 | Project Description A concise and comprehensive description of the Project Proposed construction works and subsequent maintenance/operation Scheme map, where available

2 | Background Rationale of the Project Legal aspects and compliance with relevant environmental and social laws Current environmental and social situation and considerations History of the Project development and planning; including an outline of the main alternatives

that were studied, their environmental and social impacts, and the reasons for making the final selection

3 | Process ESIA process carried out and integration with design A statement of the Project’s current state of compliance with national regulatory requirements

and relevant EU requirements Public consultations and disclosure and dealing with objections

4 | Summary of Environmental Benefits, Potential Adverse Impacts, Mitigation and Management Measures

Air quality Associated infrastructure Biodiversity and nature conservation Consistency with policy, law and other plans Cumulative impacts Induced (indirectly consequential) impacts Land use planning and changes Landscape and visual impacts Raw material sourcing and transportation, including borrow pits Road safety Traffic, noise and vibration Waste management Water resources

5 | Summary of Social Benefits Potential Adverse Impacts, Mitigation and Management Measures Community impacts Contractor management, including the siting and management of worker camps Cultural heritage Disruption and public health and safety during construction Impacts on businesses and employment Impacts to existing infrastructure and public services

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Labour issues and standards Land acquisition and resettlement (cross reference any resettlement report that is being

developed) Local traffic and access impacts Occupational and public health and safety issues Socio-economic impacts; including vulnerable groups (taking into account gender

specificities and needs)

7 Communications Contact details Process for addressing any issues arising Link to Stakeholder Engagement Plan (or similar)

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