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Romanian counties, towns merge water activities for better service
€7.2m EBRD loan helps create first regional water company
The EBRD is helping to improve water and waste-water infrastructure in small
and medium-sized towns across western Romania by funding a new regional
operating company formed across a river basin. It is the first project of its
kind, and should help small towns gain access to otherwise unavailable funds.
The Bank’s €7.2 million loan – guaranteed by Romania – will help the newly
created regional operating company Apa Somes, the result of seven towns and
two counties merging their water and waste-water activities into one.
Societatea Comerciala Compania de Apa Somes is majority owned by the county of
Cluj, with neighbouring county Salaj and seven small local towns owning the
rest. The loan is part of a pilot scheme of the Small and Medium-sized Towns
Investment Development programme – which is designed to address the long-term
financing needs of smaller towns in the water sector in Romania.
Jean Lemierre, President of the EBRD, said one of the biggest challenges for
small and medium-sized towns in Romania is getting access to finance to
improve infrastructure. By consolidating their activities, efficiency will
improve, operating costs will come down and they will get finance that
addresses the needs of local residents and businesses and improves living
standards. This is the first EBRD project of its kind in Romania, and the EBRD
remains committed to working with the Romanian government – and others in the
region – on similar projects, Mr Lemierre said.
Dragos Neacsu, Secretary of State in the Ministry of Public Finance, said
SAMTID is the first Romanian regional project for investments in water
infrastructure and it is an important step in designing successful mechanisms
for absorbing the EU funds within the context of decentralization process
going on in Romania.
The EBRD loan will help finance new distribution pipes, improve consumer
connections and water meters, upgrade valves and water hydrants and help
rehabilitate pumping stations, treatment plants and storage facilities. The
European Union – under its Phare programme – is providing €5.4 million to help
prepare the project and additional technical cooperation funds will support
institutional development and project supervision. The Romanian government
will contribute the equivalent of €1.8 million.
Societatea Comerciala Compania de Apa Somes was formed primarily on the basis
of the former RAJAC Cluj, the region’s water utility, which transformed into a
commercial company in 2004. Prior to this, RAJAC Cluj had received financing
from the EBRD through the Municipal Utilities Development Programme as well as
EU ISPA financing, which helped improve efficiency. By transforming itself
into a regional company with the neighbouring towns, it is now seeking to
maximise use of its water resources and drinking water production capacity.
The company will provide water services to over 500, 000 people in the region.
The EBRD is one of the largest investors in Romania, having committed around
€2.76 billion in 175 projects. In the Municipal sector alone, since 1995, the
Bank has invested nearly €375 million in 18 projects worth a total of around
€1 billion.
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