Plava Voda vattenprojekt, EBRD

The Replenishment Agreement w EBRD has been signed end of 2014, but since then a project start has been delayed for years due to difficulties in declaring EBRD`s loan effective as well as political disputes. The loan was finally declared effective on 2 July 2019 after delays of several years in obtaining all the approvals from all the required levels of government. Since the implementation was stucked even after declaring EBRDs loan effective due to number of politically motivated reasons, in 2019 the Embassy of Sweden communicated with EBRD its decision to cancel the investment grant if: 1) The FOPIP (Financial Operational Procurement Implementation Capacity) and Supervision consultant for leak repairs and losses reduction measures are not selected by 31 December 2019 at the latest and 2 ) the tender for all leak repair works and losses reduction measures is to be launched by 31 December 2019. These conditions were not fulfilled within the set deadline, however some progress have been noted at the beginning of 2020 and Sweden decided to give it one more chance and to extend the completion deadline of the grant component until the end of 2022, with expected tender completion for FOPIP consultant in July 2020 and launching leak repairs works tender by end of year 2020. Unfortunately, these two deadlines have not been met in envisioned timeframe either. The last availability date for EBRDs loan had expired in February 2021, however BIH have failed to declare the loan effectiveness by that deadline. Following a request and a number of assurances from BIH counterparts, EBRD has decided to approve one more extension of the loan until April 2022. EBRD agreed with BIH counterparts on key milestones to be met in order to reach effectiveness of EBRD and Central European Bank (CEB) loans. Only after declaring effectiveness of EBRD loan, Swedish grant can become operational, which has not happened. To that, EBRD faced challenges in procuring the grant funded consultant for leak repair works and losses reduction measures, so after number of delays the consultant has been finally selected by EBRD in 2022. Despite the fact the consultant was selected, the contract could not have been approved by EBRD due to the expiration of Sida funds availability. As the leak repair and technical assistance programme on water losses reduction was not possible to implement before the grant fund expiration date (end 2022), Sida has decided to not extend the availability of the grant beyond 2022. This have been communicated with EBRD and no activities have been implemented after that. No disbursements from grant funds took place. In the EBRD's annual report the project was rated Partly unsatisfactory. Difficulties within the Plava Voda project have been discussed in several SidaEBRD annual meetings as well as in bilateral meetings with EBRD office in Sarajevo. From the latest discussions with EBRD in 2022 it become apparent that there is very little, almost no, progress in the Plava Voda project and still so many difficulties. The agreement has been prolonged several times and the current agreement is expiring by the end 2022. Given the slow or no progress after many years of implementation Sida has decided to not prolong the current agreement with EBRD after the end of 2022. EBRD has been formally informed about Sidas intention not to prolong the project period and accepted it.

The overall objective of the project is to support the improvement of the existing living conditions of the population in Centracl Bosnia, as well as to support Bosnia and Herzegovina in its efforts to comply with the EU Drinking Water Directive by providing a long-term solution to water supply for citizens in 4 project municipalities. The purpose of the Project is to extend water exploitation from the Plava Voda spring, located in the town of Travnik (which currently uses it to a limited extent for local water supply), to serve three other municipalities in the Central Bosnia Canton (Novi Travnik and Busovaca), as well as the municipality of Zenica, in the neighbouring Zenica-Doboj Canton. There is a high demand for clean and efficient supply of water in the above-mentioned municipalities, especially in Zenica. Thus, the ultimate aim of the Plava Voda Regional Water Supply System project is to satisfy the needs of concerned population by providing reliable long term water supply through joint effort of the involved Municipalities, the Cantons and the Fund .