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EBRD financing to improve Krakow waste-water treatment and help reduce river pollution
Wastewater from Kraków, Poland’s third-largest city, will be treated more thoroughly and efficiently, helping clean up the nearby Vistula River, as a result of a €20 million loan from the European Bank for Reconstruction and Development (EBRD). The loan is being provided in two currencies - PLN 45.5 million and €10 million – reflecting the specific financing requirements of the borrower.
The 12-year loan is being extended to Miejskie Przedsiebiorstwo Wodociagow i Kanalizacji w Krakowie S.A. (MPWiK), the municipal water supply and sewerage company, to enable it to extend and modernise its mechanical waste-water treatment facility and construct a biological treatment facility in the P·aszów area of the city. The European Union Instrument for Structural Policies for Pre-Accession Programme (ISPA) Programme has approved Krakow’s application for complementary grant financing of approximately €55 million.
"The EBRD’s loan will not only help to reduce pollution of the Vistula River," said Thomas Maier, the Bank’s Director for Municipal and Environmental Infrastructure. "It will also enable Krakow to comply with EU environmental standards and improve its sewerage and waste-water services to consumers and industry."
The loan is being provided to MPWiK without a financial guarantee from the city of Krakow. It will therefore enable the city to invest its resources in non-revenue sectors, such as housing, education or roads. The EBRD has carried out an extensive financial assessment of MPWiK. In view of its sound financial standing and management, the Bank is willing to take the full commercial credit risk of the company.
The project is one of a number in Poland and central Europe co-financed by the EBRD and ISPA. It results from close cooperation among EBRD staff, MPWiK, the city of Krakow, ISPA, the Ministry of Environment and the National Fund for Environmental Protection. It also marks the second EBRD loan in Krakow, the first having been signed in 1998 to improve the urban transport sector.
With a population of 740,000, Krakow is a regional economic centre for the south of the country. The city is an important focus for foreign direct investment, and has a BBB+ foreign currency credit rating. MPWiK is a joint-stock company wholly owned by the city and was established in 1994. It employs some 1,150 staff, and serves over 700,000 customers in Krakow and surrounding municipalities.
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