SAO TOME WATER SUPPLY

Promoter – Financial Intermediary

EMPRESA DE AGUA E ELECTRICIDADE

Location

• São Tomé e Principe

Description

The project consists of priority investments aimed at rehabilitating and increasing the water supply and distribution infrastructure and services in Sao Tome city and surrounding areas, plus institutional support.

Additionality and Impact

The project consists of priority investments aimed at rehabilitating and increasing the water supply and distribution infrastructure and services in Sao Tome city and surrounding areas, plus project implementation support.

 

The project will address a number of market failures and investment needs in the sector, as it is expected to generate positive externalities in the form of environmental benefits notably through a more rational use of water resources and increased resilience to climate change, which impacts the availability of the water resources.

 

It is therefore a strategic investment for the country and a key priority under its National Plan for Sustainable Development 2020-2024. The project is in line with the priorities laid out in the European Commission's Multi-annual indicative programme (MIP) 2021-2027 for STP (Priority area 3: Human development), which focuses on improving sustainable and equitable access of the population to drinking water and sanitation. It is also contributing to Sustainable Development Goal (SDGs) 6 "Clean Water and Sanitation" and SDG13 - "Climate Action".

Overall, the Bank's and the EU's contribution to the project is fundamental and complements the earlier interventions of the EU in the water sector in Sao Tome. The combined concessional financial and technical assistance contribution are vital for the implementation investments under the first phase of the "City Of Sao Tome Drinking Water Supply Masterplan 2020-2040". Without the EIB and EU financing this project could not take place, due to lack of available funds from other international partners and fiscal constraints of the government. 

Objectives

The main objective of the project is to support the inclusive socioeconomic development of Sao Tome through the improvement of drinking water access (in terms of coverage and quality of the services) and increasing its resilience towards climate change impacting on the availability of the water resources and extreme scarcity events. The project will consist of a first priority phase of investments focusing on the optimisation of the existing water supply system.

Sector(s)

• Water, sewerage - Water supply; sewerage, waste management and remediation activities

Under Global Europe NDICI guarantee

Under EFSD+ Guarantee

Proposed EIB finance (Approximate amount)

EUR 14 million

Total cost (Approximate amount)

EUR 15 million

Environmental aspects

This operation is the first in Sao Tome and Principe in the water sector. An Environmental and Social Assessment as well as a climate vulnerability assessment are being carried out in the preparation phase. If necessary, a Resettlement Action Plan will be carried out as part of the detailed design activities to be implemented after the preparation phase. The project shall have positive environmental and public health impacts and will allow the population to adapt to the foreseen climate change impacts in the project areas. The Bank will verify the environmental and social risks and impacts of the project components, as well as proposed mitigation and compensation measures, in accordance with the EIB's Environmental and Social standards, as set out in the EIB Environmental and Social Handbook.

Procurement

The Bank will require the Promoter to ensure that implementation of the project will be done in accordance with the Bank's Guide to Procurement.

Status

Signed - 31/12/2022