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EBRD upgrades waste-water treatment in Sibiu, Romania
€10 million loan to benefit more than 170,000 residents
The EBRD is lending S.C. Apa-Canal S.A., the water-utility company of the City
of Sibiu, in central Romania, €10 million to help improve waste-water services
for more than 170,000 residents across the municipality.
The loan, guaranteed by the municipality of Sibiu, is being made alongside a
€25.6 million grant from the European Union’s ISPA programme. The combined
financing will help support the extension and rehabilitation of the sewer
network, rehabilitation of the drinking-water treatment plant, and metering
and monitoring of the water-distribution network.
Thomas Maier, Director of the Municipal and Environmental Infrastructure team
at the EBRD, said the project is very much in line with the Bank’s strategy to
support local utilities without sovereign guarantees. The loan is a strong
signal of the EBRD’s growing confidence in the strength of some of Romania's
local authorities, and the Bank will increase its support to municipalities
across the country, including in areas such as district heating and public
transport, Mr Maier added.
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. More than €80 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 Government of the Netherlands also provided €2.2
million in technical cooperation funds to help prepare the overall facility
and will provide a further €0.8 million to support implementation of the MELF
projects. The EBRD has syndicated €5 million of the loan to Bank Austria
Creditanstalt, which for the second time participates in an EBRD loan under
the MELF framework in Romania.
Klaus Johannis, Mayor of Sibiu, said the project is the result of excellent
cooperation between the municipality and the EBRD and marks the first step of
a long-term relationship for the benefit of the population of Sibiu. The loan
is the EBRD’s seventh to Romanian municipalities under the MELF programme and
the eighth issued to municipalities without a sovereign guarantee. The
benefits of reforming municipal finance in Romania are beginning to show.
The EBRD has invested €2 billion in Romania, including more than €290 million
in the municipal and environmental infrastructure sector.
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