MUNICIPAL WATER INFRASTRUCTURE NORTH MACEDONIA

The project consists of the construction and rehabilitation of water supply, wastewater collection and treatment infrastructure, and emergency flood protection measures for the 80 municipalities of the country under a framework managed at national level by the Ministry of Environment and Physical Planning. This project is in continuation of 2008-0446 WATER SUPPLY AND WASTE WATER COLLECTION.

The project aims at supporting the Promoter's capital investment programme at municipal level in most aspects relating to water supply, collection or treatment, alongside national budget support, European Union contributions and other International Financial Institutions (IFIs)/Development Finance Institutions (DFIs) co-financing. The underlying driver is the need to increase water supply in urban and/or rural areas and to improve waste water disposal throughout the country, thereby increasing living standards, in compliance with all relevant EU Directives. The loan concerns investments in most of the municipalities of the country.

The project consists of the construction and rehabilitation of water supply, wastewater collection and treatment infrastructure, and emergency flood protection measures for the eighty municipalities of North Macedonia. The project is a strategic investment for the country and a priority in view of their accession path and adherence to EU directives, standards and acquis. The project is fully in line with National Strategies, EU policies as well as the Sustainable Development Goals.

This project contributes to supporting economic growth and environmental sustainability by improving the coverage, quality and resilience of integrated water services and reducing pollution of watercourses. Collection systems are generally old in North Macedonia and only a minority of the sewage is currently treated with most of the wastewater being discharged directly into rivers and lakes. The project will contribute to closing a significant investment gap in the sector and provide the Government and the Municipalities with a large and long-term financing source, at terms currently un-matched by the market.

EIB's contribution is substantial, representing some 40% of the municipal water infrastructure planned investments and rehabilitation. The programme will also improve local capacity in planning and implementing water investment projects, improving quality standards, procurement processes and environmental sustainability.

The project will generally benefit the environment and public health, either by providing better drinking water to the population, improving the efficiency of the treatment and distribution facilities, or by collecting and cleaning wastewater before discharging into receiving waters. As an EU candidate country, the project will support North Macedonia's process for gradual compliance with EU standards and regulations on water, sanitation and the environment, and will provide the base for a possible accession agreement in the environmental chapter. Compliance with national Environmental Impact Assessment (EIA) legislation that has been drafted by transposing EU EIA Directive 85/337/EEC, amended by directives 97/11/EC and 2003/35/EC will be verified during the appraisal. With regards to regulations concerning the protection of habitats, respective EU Directives (92/43/EEC and 79/409/EEC) are considered to be transposed, subject to verification during the appraisal. North Macedonia is part of the international Emerald network, and procedures for compliance herewith will also be verified. The project will also help to meet national river quality objective (RQO) improvement targets set by the national Environmental Authority in line with the EU Water Framework Directive (2000/60/EC).

The Bank will require the Promoter to ensure that any procurement procedures are done in accordance with the Bank's Guide to Procurement and the relevant applicable EU public procurement rules.

Under EFSD+ Guarantee