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EBRD and Lyonnaise des Eaux to provide municipal services in central and eastern Europe
The European Bank for Reconstruction and Development (EBRD) today signed a US$ 90 million (ECU 67.6 million) multi-project facility (MPF) with Lyonnaise des Eaux, a leading international urban services and construction company based in France. The equity and loan facility will support the Lyonnaise des Eaux programme of investment in central and eastern Europe for the private provision of municipal and environmental services under Build-Operate-Transfer (BOT) and concession contracts. Jacques de Larosière, President of the EBRD, and Jérôme Monod, President of Lyonnaise des Eaux, signed the agreement in London today.
At the signing, Mr de Larosière said: “This project forms an important landmark not only for the EBRD but for the region. It constitutes the first-ever financing by an international financial institution of private investments in municipal services and infrastructure in central and eastern Europe. The MPF offers an innovative and effective vehicle to support private sector provision of these services. Given the extent of inefficiency and under-investment in the region's municipal and environmental services, private sector participation in their financing and management will bring major benefits. The MPF will help improve the availability and quality of essential public services and ameliorate environmental conditions”.
Mr Monod commented: “Lyonnaise des Eaux has made central and eastern Europe a main target area for its delegated management of public services and infrastructure activities abroad. I am pleased to have found a form of co-operation with the EBRD that will facilitate the introduction of private–public partnerships in this region and that will help improve living conditions there”.
The MPF's main objectives are to promote and facilitate private involvement in the provision and financing of municipal environmental services and infrastructure, including water supply, waste water treatment, solid waste disposal and district heating, in central and eastern European countries. It also aims to finance relatively small-sized investments in these sectors and to become involved in waste management projects. The investment projects considered under the multi-project facility involve the development or rehabilitation of services that carry strong environmental benefits.
The EBRD’s partners in the MPF agreement are Lyonnaise and those of its subsidiaries that are active in the municipal environmental services sector in the region. Starting its expansion into international markets in the early 1980s, the company now operates in more than 80 countries and employs over 140,000 staff. In 1994, the Lyonnaise group had consolidated revenues of US$ 21 billion, 45 per cent of which were generated outside of France.
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