Modernization of water-supply system in the city of Aktau - Corporate Development Program

The Akimat of Mangistau region,  "KZhSA" GKP (the state-owned enterprise with the right of economic management) and the EBRD signed a loan agreement on project support for the "Modernization of water supply and sanitation system in the City of Aktau" project in the amount of 8 million US dollars and provision of a technical assistance grant in the amount of up to 1.5 million US dollars for the investment in the water supply and sewerage sector of the city and improving the financial and operational indicators of “TVSiV” GKP (The state-owned enterprise on the right of economic management), a municipal water supply and district heating company in Aktau, Mangistau region.

The objectives of the project are to improve the efficiency of water supply and sanitation services, to reduce the risk of environmental pollution, to improve the quality of services in the water supply and sanitation sectors and increase the reliability of water supply system in Aktau. In addition, the project aims to promote tariff increases through commercialization of the company and introduction of a service agreement (or a management agreement), as well as to promote the formation of market behavior patterns through the demonstration effect of new instruments for water sector financing in Kazakhstan. Further, the consultants’ contribution was aimed to increase transparency and improve business standards through the implementation of IFRS and implementation of the Eco-Social Action Program.

The priority investment program included the following components:

- Rehabilitation of critical sections of the water supply network;

- Reconstruction of compressor pumping stations in the sewerage system;

- Provision of equipment for maintenance and leak detection in water supply and sewerage networks, laboratory equipment for wastewater treatment.

A technical audit of the existing facilities and activities of the Company was carried out in order to determine the current regulatory compliance and justify the choice of priority investments. As a result, the implementation of the Project components contributed to the reduction of negative environmental and social impacts as well as brought significant benefits for health and environment. Prior to modernization the drinking water quality did not meet national wastewater treatment standards and EU consumer standards due to poor condition of water supply networks, pipeline leaks and breaks. The water quality monitoring was insufficient, which created risks to public health. The quality of the wastewater also did not meet national and EU standards due to the presence of sludge in the wastewater, as well as due to the poor condition of the existing treatment facilities. The way of discharging untreated wastewater was unacceptable and should have been stopped. The practice of sludge disposal still raised concerns about significant bacteriological contamination. For the same reason, the existing sludge fields were heavily contaminated, making the sludge unsuitable for reuse in agriculture or for other purposes.

Accordingly, the Project provided for a significant improvement in the selected water supply and sanitation facilities, and, therefore, contributed to the improvement of the environment and public health in Aktau. The project also delivered considrable environmental and social benefits compared to the previous situation by improving the quality and efficiency of drinking water supply, sewage collection, transport infrastructure and services in the city.