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EBRD helps Croatia's Zagreb clean up its waste
Capital to build wastewater treatment facilities in partnership with private sector
The Croatian capital Zagreb currently has no wastewater treatment facilities for its 900,000 inhabitants, which poses a serious threat to the local environment and the Sava River. That should change thanks to a loan from the European Bank for Reconstruction and Development to help build the city's first wastewater treatment plant. The EBRD will provide €55 million to Zagrebacke Otpadne Vode (ZOV), a private company chosen through an international competitive tender to build and operate the plant. The project will be co-financed with a €115 million loan from German bank Kreditanstalt für Wiederaufbau (KfW).
The new treatment plant will be built to comply with European Union wastewater environmental standards. Under its contract, the concessionaire ZOV is to build and operate the treatment plant for 28 years. It will also construct, though not design or operate, the supporting infrastructure, including an access road, collecting pipeline, cover for a drainage canal and a bridge. Construction is expected to take six years.
Johan Bastin, the EBRD's Business Group Director for Infrastructure, said the concession agreement promotes effective management of the utility by encouraging best practices. These include setting out clear lines of responsibility, putting in place an effective system to monitor progress on the project and setting financial incentives to encourage efficient investment and operation. Mr Bastin said he hopes similar initiatives will be undertaken in other Croatian towns and cities.
ZOV is 97 per cent owned by a consortium consisting of RWE Aqua GmbH, a subsidiary of Thames Water Aqua Holding GmbH, and SHW Hölter Wassertechnik, a subsidiary of Berlinwasser Holding Aktiengesellschaft. The remaining 3 per cent is owned by Vodoprivreda Zagreb, wholly owned by the City of Zagreb. This group will provide additional investment, which together with funds generated internally by the company should bring the total project value to €320 million.
This project is part of the EBRD's strategy of promoting private-sector involvement in the provision of municipal infrastructure services in central and eastern Europe.
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