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EBRD’s first long-term zloty loan improves water services in the city of Bydgoszcz in Poland
The population of Bydgoszcz, Poland’s eighth-largest city, will benefit from better-quality drinking water and improved water services as a result of a loan of PLN 108 million (EUR 21 million) provided by the European Bank for Reconstruction and Development (EBRD). The 15-year senior corporate loan has been extended to Miejskie Wodociagi i Kanalizacja w Bydgoszczy Sp. Z o.o (MWiK), the municipal water supply and sewerage company. The Polish Ministry of Environment has, on behalf of the city, applied for complementary grant financing for sewerage improvement from the new European Union ISPA programme.¹
"This investment project not only brings important benefits through improved drinking water and environmental protection, but also includes innovative financing features," said Johan Bastin, the EBRD’s Infrastructure Business Group Director. "As well as being the EBRD’s first loan in Polish zloty, the project introduces a new financing structure for the country. The loan is also being provided to the municipal water and sewerage company without a financial guarantee from the city. This will leave Bydgoszcz financing capacity for investments in non-revenue sectors, such as housing, education or roads. It is also the first project in Poland that is expected to benefit from co-financing by the EU’s new ISPA instrument." Mr Bastin continued: "We hope to build on our close cooperation with the municipal authorities of Bydgoszcz to finance further infrastructure investments there."
Grazyna Ciemniak, Deputy Mayor of Bydgoszcz, said: "This project is the result of intensive cooperation between the city of Bydgoszcz, MWiK and the EBRD as well as the Ministry of Environmental Protection and the National Fund for Environmental Protection, which has led to a development programme for water and waste-water services in the city. The implementation of this project will improve water and waste-water systems in the city and will help to eliminate one of the "hot spots" under the Helsinki Convention. The improvement of living standards and the environment is the first priority in the development strategy of the city of Bydgoszcz, which aims to make a positive contribution to Poland's national plan for EU accession.
Stanislaw Drzewiecki, Managing Director of MWiK, said: "Despite continuous upgrading, the current water and waste-water system does not guarantee services of the required quality. Thanks to the EBRD's loan and the anticipated financial support from ISPA, MWiK will be able to solve its remaining technical and organisational problems. This will allow MWiK, which is celebrating its 100th anniversary, to become a modern company that meets EU standards."
The total project cost of PLN 294 million (EUR 56 million) will enable MWiK to meet its priority investment needs and will be used to finance improvements to drinking water supply and sewerage. These include modernisation of water intakes, upgrading water treatment plants, water supply network and pumping stations, intercepting sewer discharges to the Brda River, and extending the sewer network. The project will help MWiK to comply with EU environmental standards, and there will be significant environmental benefits through a reduction in the pollution of the Brda and Vistula rivers and the Baltic Sea. The project is also designed to increase efficiency in the provision of services by strengthening the operational and financial performance of MWiK and developing its contractual relationship with the city.
Bydgoszcz is the capital of Poland’s Kujawsko-Pomorskie region, and is a major contributor to the regional economy. Located some 150 km from the Baltic Sea, it has an inland harbour, and is a key centre for industry, including food processing, engineering, chemicals and electronics, as well as financial and other services. MWiK was established under municipal ownership in 1992, and employs 600 staff. It operates the city’s water supply and sewerage networks, two water treatment stations and three waste-water treatment plants.
¹ Note to the editor: ISPA is the Instrument of Structural Policies for Pre-Accession set up by the European Union.
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