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Loan helps Romanian town of 160,000 get clean water
The EBRD is lending Regia Autonoma Aquaserv, the local water utility in Targu Mures, in central Romania, €7 million to help bring clean drinking water and help improve waste-water services for over 160,000 residents across the municipality.
The 15-year loan, guaranteed by the municipality of Targu Mures, is being made alongside a €20.9 million grant from the European
Union’s ISPA programme to support the extension of the sewer network, improve storm management within the network and help rehabilitate the water plant.
Sue Goeransson, Senior Banker at the EBRD, said continued lending to local utilities without sovereign support is a strong signal of the EBRD’s growing confidence in the strength of some of Romania's local authorities.
The loan is being provided under the Municipal Environmental Loan Facility (MELF), set up in 2000 to provide co-financing with the ISPA programme for waste-water-related projects in Romania. More than €52 million of EBRD loans have been extended in concert with ISPA grants, which help improve living standards and prevent environmental pollution through compliance with EU environmental standards.
The loan is the EBRD’s fifth to Romanian municipalities under the MELF programme and the fifth issued to municipalities without a sovereign guarantee. The benefits of reforming municipal finance in Romania are beginning to show. Ms Goeransson added that those service utilities and local governments that have implemented tariff reform and commercialisation are now in a position to obtain capital directly.
The EBRD has invested €1.8 billion in Romania, including more than €200 million in municipal and environmental infrastructure.
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