The EBRD is investing up to €80 million equity to help raise the quality of water supply and waste water operations across eastern Europe.
This equity investment in a private company active in the water sector will also expand the role of the private sector and so boost competition in an area traditionally dominated by the state.
The EBRD is buying a stake in aqualia new europe, a company set up specifically to invest in water concessions and acquire other privately-held water groups in the EBRD region.
aqualia, a subsidiary of Spanish group FCC, a company with a very strong track record in the industry, will be the majority shareholder. aqualia currently provides water and wastewater services to over 26,000,000 people in more than 1,100 municipalities worldwide. It is active mainly in southern Europe, including Spain and Portugal as well as the Czech Republic. It also works in Italy, Algeria, Mexico and China.
With the backing of the EBRD, aqualia intends to expand into Slovakia, Poland, Hungary, Romania, Russia and other countries in the former Soviet Union, where an improvement in the water management and infrastructures is in high demand. Given its strong track record, aqualia is well-placed to address needs in these markets.
Signing the agreement, EBRD First Vice-President Varel Freemen said: "This important investment helps to address an urgent need to improve the standard of water supply and the treatment of waste water for people across eastern Europe".
During the signing ceremony, Miguel Jurado, Vice-President of aqualia, thanked the Bank for its support to and its confidence in this project, and highlighted the experience of aqualia in the water market, especially in central and eastern Europe, which will help to achieve the set targets within the next years.
By increasing private sector ownership in the water sector, the EBRD is also aiming to introduce modern management techniques in the industry and raise environmental compliance standards.
The Bank's investments to improve infrastructure in the EBRD region are aimed at removing obstacles to sustainable economic development and to improve the quality of services. Its financial support is particularly critical now given the current scarcity of alternative commercial funding.
*aqualia implements its business model worldwide, already working in countries such as Italy, Czech Republic, Portugal, Algeria, China or Mexico, attending a population of more than 26,000,000 inhabitants.