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EBRD's loan to local service utility in Romania should help boost tourism
Romania’s main tourist destination on the Black Sea – Constanta – will benefit from an extensive upgrade to its waste-water infrastructure through financing from the European Bank for Reconstruction and Development (EBRD). Constanta Water Company, the local service utility, today received a €20 million corporate loan from the EBRD as part of an overall environmental improvement programme totalling around €100 million. A further €72.4 million is earmarked to come from European Union ISPA grants.
Backed by a financial guarantee from the district of Constanta, the EBRD’s loan is the first direct financing of a local service utility in Romania without recourse to a sovereign guarantee.
"This loan represents an important milestone. It provides a clear indication that those service utilities and local governments in Romania that have implemented tariff reform and commercialisation are now in a position to obtain capital directly within the reformed municipal finance framework of Romania," said Thomas Maier, Director of the EBRD's Municipal and Environmental Infrastructure Team. The EBRD loan will finance the refurbishment and modernisation of waste-water pumping stations, sewerage systems and overflow structures.
Stelian Dutu, President of the County Council, said: "The environmental clean-up of the coastal waters associated with this project will enable us to remove one of the major obstacles for growth of the tourist industry, which attracts around 1 million visitors each summer. In addition, it will push forward the conversion of Constanta Water Company into a joint-stock company and help in the search for a private-sector partner for the urgently needed upgrading of the company’s water treatment facilities."
Sergiu Teodoru, Managing Director of Constanta Water Company, said: "The EBRD’s corporate loan, which complements an earlier sovereign facility, will help us achieve compliance with European Union environmental standards. It is also a recognition of our successful efforts to develop the company into a financially and operationally sound service utility."
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