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Bulgarian coastal city to get infrastructure upgrade
€11 million loan to Burgas is Bank’s first to water company outside Sofia
Residents and tourists along Bulgaria’s Black Sea coast should benefit from a
€11 million loan from the EBRD to the state-owned Burgas Water Company to help
expand and improve its infrastructure.
It is the first loan by the Bank to a regional water company outside of Sofia
and around five similar projects in regions across Bulgaria are planned. It is
also the EBRD’s first project co-financed with the European Union in the water
sector in the country, which is expected to provide a grant of €20 million
under its ISPA programme.
Burgas, a city on Bulgaria’s east coast which is attracting a growing number
of tourists, has for years suffered from a lack of investment in municipal
infrastructure. The Bank’s loan will help improve water and waste-water
infrastructure, benefiting the 426,000 year-round inhabitants – and 1.2
million in summer months – it provides water and sewage services for. The EBRD
and EU investment will also help Burgas and the Black Sea region meet European
environmental standards.
Henry Russell, EBRD Deputy Director for Municipal Environmental
Infrastructure, said this Project is possible because of recent reforms
implemented by the authorities. The Government adopted a strategy to enable
loans directly to local water companies without sovereign guarantees, and the
recent introduction of an independent water regulator should improve the
creditworthiness of regional water companies. These initiatives will improve
standards at local municipalities benefiting local residents, Mr Russell added.
The EBRD is setting conditions on the loan that will enable the water company
to become more dynamic and commercially oriented, while other conditions
include further improving legislation and regulatory reform that can assist
further investment in the sector.
To help support project preparation, significant technical cooperation funds
were provided by the Italian government and the Central European Initiative.
Further funds are expected from the Canadian International Development Agency
to support institutional building at both the Company and the City.
Valentin Tserovski, Minister of Regional Development and Public Works, said:
"This is a very important infrastructure project worth €32 million, and it
shows very good cooperation between the EBRD, EU and the Burgas water company,
which is providing €1 million towards the project. We hope the company will
propose a good investment programme to the independent water regulator, a
programme which should be the basis for future market-oriented behaviour of
the company."
The EBRD is the largest investor in central and eastern Europe and the
Commonwealth of Independent States. In the municipal sector alone, the Bank
has invested more than €1.6 billion in 20 countries. The Bank is also the
largest investor in Bulgaria, having invested more than €1 billion in 53
projects.
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