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EBRD promotes improved water, waste-water services in Sofia
More than 1 million residents of Sofia, Bulgaria, will benefit from the country’s first privately managed water and waste-water company, Sofijska Voda AD, which today received a €31 million loan from the European Bank for Reconstruction and Development (EBRD). The funds will help the company improve maintenance of the city’s pipe system, enhance customer service and promote a more efficient and easy-to-use billing system.
Sofijska Voda is majority owned by International Water UU (Sofia), whose parent companies include Bechtel Enterprises Holdings Inc., Edison SpA and United Utilities plc. The sponsor group will provide combined subordinated debt and equity, which together with funds generated internally by the company bring the total amount of the five year project to €94 million.
Johan Bastin, the EBRD's Business Group Director for Infrastructure, said: "Under this agreement, Sofijska Voda is obliged to provide a reliable and environmentally friendly supply of water to the city’s residents as well as the clean and efficient disposal of waste water. It will demonstrate that private-sector capital can be mobilised for significant improvements in standards of living and health."
The EBRD played a central role in helping Sofia define parameters for private-sector participation, as well as mobilising independent advisors who worked with the city to prepare the project and select a concessionaire through open and competitive international bidding. The 25-year concession contract gives Sofijska Voda the responsibility of running Sofia’s water and waste-water services while keeping ownership of the assets in the hands of the city. It contains a number of innovative provisions dealing with tariff adjustments and dispute resolution that should have a demonstration effect not only in the region but for similar concessions elsewhere in the world.
The EBRD’s finance will support Sofijska Voda’s capital expenditure programme for the first five years of the concession, including start-up costs. Initial investments will concentrate on the rehabilitation of the water and sewerage networks to reduce leakage and infiltration, ensure reliable supply as well as streamline billing and financial management.
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