The proposed loan will finance a priority investment programme in the water services sector in the City of Aktau, population of ca. 150,000, in the west of Kazakhstan bordering the Caspian Sea. The client TVS&V (Aktau Water Company) is responsible for the distribution of heat, hot water, technical water and drinking water, and the collection, treatment of municipal wastewater, replacement of electrical and pumping equipment and auxiliary investments like maintenance and leakage detection equipment.
The feasibility study was executed with following key elements:
- technical and financial feasibility assessment
- a financial analysis of the Water Company and preparation of financial projections
- determination of an efficient implementation strategy for the priority investment programme
- an environmental audit of the existing facilities and operations and an environmental analysis
- Environmental and Social Action Plan
Main areas of attention
- district heating and hot water network
The district heating system is combined with the hot water system. Most of the pipes are between 30 and 40 years old.
- water distribution network
Large parts of the distribution networks for drinking water and technical water are in a poor condition and there is a lot of corrosion, in the technical water network especially.
The current insufficient condition of the sewerage network could result in an organical and bacteriological contamination of the Caspian Sea. Two main risks are flooding of the sewerage network through a disrupted operation of the pumping stations and infiltration of wastewater into the soil due to leaking or broken sewerage pipes.
- wastewater treatment facility performance
The mechanical pre-treatment of the wastewater treatment facility is in a deteriorated state of condition. The resulting poor performance of the mechanical pre-treatment in combination with the current layout of the aeration basins and the use of the aeration system are likely to prevent that that the effluent meets the standards. The lay-out, technology and equipment applied for the biological treatment are considered to be outdated and are resulting in a low energy-efficiency.
Both primary (non-stabilised) sludge from the mechanical pre-treatment and excess secondary sludge (stabilised) from the biological treatment process, are directly transported to the sludge drying fields. This primary sludge has a septic character and is therefore bacteriologically contaminated. The primary sludge results in a major odour emission when directly brought on sludge drying fields.
- discharges into lake Koshkar-Ata
The discharge of untreated wastewater from the upper part of Aktau results in a substantial biological and bacteriological contamination of lake Koshkar-Ata. A new programme is currently being implemented for the construction of a wastewater treatment facility in the vicinity of Koshkar-Ata close to the current outflow of the existing pressure transport main. The ultimate total hydraulic capacity will be 70,000 m3/day.
- effluent transport from existing Waste Water Treatment Plant to lake Koshkar-Ata
The effluent of the wastewater treatment facility is transported to Koshkar-Ata for discharge through a transport pressure main in combination with an open channel. The pipeline as well as the open channel are owned and operated by a third party.
The Water Company is very dependent on the electricity company MAEK. The Water Company gets treated water from MAEK and receives money from MAEK for the distribution inside the city. MAEK sells the water and heat to domestic users, businesses and public entities and invoices these customers accordingly. For wastewater, the situation is different. The Water Company is solely responsible for wastewater transportation, treatment and disposal.
The financial assessment shows a positive outcome for both the priority investment programmes as well as the long term investment programme for all macro-economic scenarios. One of the main reasons for the positive outcome of the financial assessment is the beneficial financing arrangement. Two-third of the investments will be funded with equity and one-third with bank loans. Virtually all costs for financing the large investment programmes can be covered by the (increased) tariffs in the years to come. The project proves to be particularly vulnerable to technical losses, as any loss above the approved normative loss cannot be recovered from consumers.
The Priority Investments are intended to be financed by EBRD, Akimat and another donor to solve the most important issues mentioned before. The budget is divided in three more or less equal shares of EUR 8 million. Furthermore the investments are to be divided equally between improvements of the wastewater infrastructure and water supply infrastructure.