|
EBRD loan to Krakow puts fast tram on track
The European Bank for Reconstruction and Development (EBRD) is continuing to offer strong support to municipal and environmental infrastructure projects in Poland by extending a 15-year ECU 45 million loan without a sovereign guarantee to the city of Krakow. The largest loan ever extended to a Polish city will enable Krakow to implement the first phase of a fast tram system. The EBRD has been assisting the municipality in developing the project and has made significant amounts of technical cooperation resources available from its trust funds for the technical, legal and financial structuring of the project. It has also assisted Krakow in obtaining a credit rating (BBB-) from Standard & Poor's.
"The EBRD recognises the critical importance of investment in municipal infrastructure and services to facilitate the economic transition of Poland," said Johan Bastin, Director of the EBRD’s Municipal and Environmental Infrastructure Team. "Signing this project today is highly significant as it demonstrates the EBRD’s commitment to continue providing long-term financing to creditworthy cities, despite current market instability. The Bank is able to take direct municipality risk, with no sovereign guarantee and no commercial bank guarantee. In this respect, the EBRD is unique among multilateral and international financial institutions working in Poland. We are pleased also that the European Investment Bank agreed to provide co-financing."
The Krakow urban transport programme aims to improve accessibility to the city centre and to stimulate urban development. The loan will finance a turnkey contract for the first phase of the fast tram investment project, which includes project management advice, urban traffic control equipment and consultancy, plus parking management equipment and services. The project also comprises a programme to enable the city to improve its financial planning, management and performance.
With a population of 74 0,000, Krakow is the third-largest city in Poland and a regional economic centre for the south of the country. Major industries in the region include steel, tobacco, spirits, food processing and pharmaceuticals. The city is an important focus for foreign direct investment. As the commercial core shifts eastwards away from the old town, the new fast tram will provide increased accessibility on an important new axis.
The Bank has worked closely with the city of Krakow and its consultants to prepare this project, as well as with the European Investment Bank, which is providing valuable co-financing. This is the second municipal loan signed by the EBRD in Poland this year following the ECU 16 million Wroclaw flood damage rehabilitation loan (April 1998). The Bank is currently developing new projects in Gdansk, Katowice, Lodz, Poznan and Warsaw in urban transport, water, waste-water and solid waste.
|
