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Estonian towns to improve water supplies through EBRD loan
Thirteen Estonian municipalities are to benefit significantly from an ECU 10.6 million loan signed yesterday in Tartu, Estonia, between the Estonian Water Company and the European Bank for Reconstruction and Development (EBRD). The project will improve the quality and reliability of water supplies and waste-water treatment services for 380,000 Estonian citizens and generate substantial environmental benefits.
At the signing, attended by Estonia’s Minister of Finance Mart Opman, Timo Makela, Director of the EBRD'S Municipal and Environmental Infrastructure Team, said: “This EBRD project enhances conditions for continued economic growth in Estonia. Reliable, high quality municipal services, such as water supply, are fundamental to the economic transition process. It is also an important step in the further decentralisation of service provision in Estonia and will significantly reduce water-borne pollution in the Baltic Sea”.
A precondition of the project was the creation of a municipality-owned, joint-stock company named Eesti Veevark AS, the Estonian Water Company (EWC), which will provide services to the water and waste-water industry.
The total project cost is ECU 45.8 million, of which the EBRD loan will finance ECU 10.6 million, the Government of Estonia ECU 4.2 million and the municipalities ECU 17.8 million. Donor grants totalling ECU 11.6 million will be contributed by EU-Phare, Denmark, Finland, Norway, Sweden and Switzerland, while the Nordic Environment Financing Company (NEFCO) will provide ECU 1.6 million.
The project will rehabilitate and construct sewage treatment plants and networks, water supply intakes and water supply networks. This loan agreement marks an important achievement for the EBRD in the sector and region. The borrower is a joint-stock company owned by municipalities; it is the first multi-community project in the water sector in the Baltics; and it serves as a model for future projects elsewhere in the region.
The Small Municipalities Environment Project is the EBRD's second environmental infrastructure operation in Estonia. The first, the Tallinn Water and Environment Project, was signed in September 1994.
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