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Upgrade for waste-water treatment in Bacau, Romania
€13 million loan to benefit more than 190,000 residents
The EBRD is lending Regia Autonoma de Gospodarire Comunala Bacau (RAGC Bacau),
the water utility company of the City of Bacau, in eastern Romania, €13
million to finance rehabilitation works for the city’s waste-water treatment
facilities.
The loan, guaranteed by the municipality of Bacau, complements a €39 million
grant from the European Union’s ISPA programme.
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
wastewater-related projects in Romania. Since then the EBRD has lent more than
€80 million to nine transactions, mobilising ISPA grants of around €280
million. The Government of the Netherlands provided €2.2 million in technical
cooperation funds to help prepare and implement the projects. In this
transaction, EBRD has syndicated €6 million to Bank Austria Creditanstalt,
making this the third project in which the two banks have cooperated in
Romanian municipal infrastructure.
Dana Craciunescu, EBRD principal banker, said the project reflects the Bank’s
policy to lend to commercialised utilities in Romania, which have the ability
to generate sufficient cash flow to service debt. Those service utilities and
local governments that have implemented tariff reform and commercialisation
are now in a position to obtain capital directly, Ms Craciunescu added.
Aleksander Majewski, Project Manager, Corporate & Project Finance CEE of Bank
Austria Creditanstalt, said that the transaction was yet another example of
the excellent cooperation between the EBRD and Bank Austria Creditanstalt. It
shows that an international commercial bank is able to provide loan financing
to well structured projects at the municipal level in Romania. Bank Austria
Creditanstalt has the largest network in Central and Eastern Europe, with
1,300 branch offices in 11 countries employing 28,000.
The EBRD is the largest investor in Romania, having invested €2.5 billion in
nearly 120 projects, including more than €300 million in the municipal and
environmental infrastructure sector.
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