Project description
and objectives:
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The EBRD proposes to provide long-term lines of credit to local commercial banks in the EU Accession countries for on-lending to municipalities. The Bank would also share the risk of sub-loans with the banks. The European Commission would provide grant support to the project. Initially, financing will be available in Poland, Hungary, and Slovenia and Romania, but later may be offered in other countries including Bulgaria, Czech Republic, Estonia, Latvia, Lithuania, and the Slovak Republic.
The project objectives are to:
- Meet the need for long-term funding for municipal infrastructure and energy efficiency investments;
- Use local intermediaries to reach smaller municipal borrowers than EBRD can directly;
- Share risk with the banks to encourage them to extend the maturities of municipal loans;
- Build the institutional capacity of banks in municipal finance, in particular with respect to energy efficiency;
- Improve the creditworthiness of small municipal borrowers through programmes to enhance creditworthiness;
- Enhance the capacity of municipalities to structure and apply for financing for energy efficiency investments.
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Sub-projects:
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- EU/EBRD MFF (Risk sharing) - Dexia Slovensko MFF
- EU/EBRD MFF (Credit Line) - BCR SA
- EU/EBRD MFF (Credit Line) - Alpha Bank Romania
- EU/EBRD MFF Komercni banka Czech Rep.
- EU/EBRD MFF - Abanka Slovenia
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Transition impact:
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- Facilitate access to medium and long-term credit for municipalities which have limited access to such funding;
- Strengthen capacity of local banks in municipal and energy efficiency finance;
- Demonstrate to the banking sector the viability of long-term lending to municipalities, including small municipalities to encourage them to expand financing of these infrastructure and energy efficiency projects;
- Demonstration of the benefits of rational energy usage;
- Building expertise (among banks and municipalities, including ESCOs);
- Raised energy efficiency awareness both in the public and private sector.
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The client:
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EBRD is in discussion with commercial bank clients to be confirmed following negotiations.
Municipalities, municipally owned companies and private companies providing municipal services will be the beneficiaries of financing for energy efficiency investments.
For general municipal infrastructure investments, excluding energy efficiency, small municipalities with fewer than 100,000 inhabitants will be the beneficiaries of the sub-loans.
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EBRD finance:
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EUR 120 million in lines of credit to local banks. Typical loans to banks will range from EUR 10-15 million.
Risk-sharing by EBRD with the banks in an amount equivalent to 35% of principal of sub-loans.
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Total project cost:
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EUR 120 million
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Environmental impact:
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This facility has the specific aim of assisting smaller municipalities in developing infrastructure that meets EU standards for environment, health and safety. Environmental due diligence will be conducted on each sub-loan to be financed under this facility. Municipalities will be required to meet national and EBRD requirements for public consultation.
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Technical
cooperation:
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Technical Cooperation will be funded by EC Phare to:
Provide creditworthiness enhancement programmes for small municipalities;
Improve local banks’ lending capacity in municipal finance, in particular for energy efficiency investments;
Assist municipalities to identify potential for improvements of energy usage and to prepare energy efficiency projects for financing.
Tendering under the Facility will follow EBRD’s Procurement Policies and Rules for public or private sector operations as appropriate. It is anticipated that the majority of contracts will be small civil works contracts below EUR 5 million, which would follow local tendering procedures in accordance with the Bank’s Rules.
For consultant opportunities for projects financed by technical cooperation
funds, visit procurement
of consultants.
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Company contact:
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tba
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EBRD contact:
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Teresa Godwin-Coombs, Operation Leader: godwint@ebrd.com
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Business opportunities:
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For business opportunities or procurement, contact the client company.
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General enquiries:
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EBRD project enquiries not related to procurement:
Tel: +44 20 7338 7168; Fax: +44 20 7338 7380
Email: projectenquiries@ebrd.com
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