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EBRD finances Sofia urban transport
Bulgarian capital gets €35 million to upgrade and privatise urban transport system
The European Bank for Reconstruction and Development will improve bus and tram services in the Bulgarian capital Sofia with a €35 million loan to the city that does not carry a sovereign guarantee. The loan, including €15 million from commercial banks, will help refurbish Sofia's tram fleet, purchase new buses and hire consultants to help the city seek private-sector operators to run the system.
Gavin Anderson, the EBRD's Business Group Director for Infrastructure, said public-private partnerships under a well-regulated system encourages greater competition, increases customer service and ensures a higher quality and more cost-effective urban transport system. It is the fourth time in twelve months that the EBRD has supported an urban transport project. It has financed similar investments in the Yugoslav capital Belgrade, as well as the Polish cities of Sopot and Gdansk.
The EBRD's secured loan will be for 10 years with an initial three-year grace period, whilst the commercial bank co-financing matures after eight years. This represents the longest loan maturity granted to the City of Sofia, which will repay out of its general revenues.
The City of Sofia and the EBRD have a successful history of co-operation. In 2000, the EBRD assisted the city with the financing of its privatised water and wastewater services. The two parties are also working on a transaction to improve the city district heating system.
This brings the EBRD's total number of projects in Bulgaria to 37, with a total Bank commitment of €639 million.
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