The European Bank for Reconstruction and Development (EBRD) is providing a €10 million loan to Moldova to develop a regional water supply system in the country’s north, including its second largest city of Bălți.
The loan, to be split in two tranches of €6 million and €4 million, is part of a financing package of €30 million, which also includes a €10 million loan from the European Investment Bank (EIB) and an expected €10 million capital grant from the European Union’s Neighbourhood Investment Facility (NIF).
The financing will enable the municipality of Balti and six districts – Florești, Soroca, Sângerei, Telenești, Râscani and Drochia – as well as the Ministry of Environment to consolidate their water and wastewater infrastructure into a joint operating company. The newly created regional operator will then develop the Soroca-Bălți water pipeline into a more integrated water supply system, which will improve the quality and efficiency of water and wastewater services across Moldova’s northern region.
The investment will help rehabilitate the Soroca-Bălți pipeline and other water networks in the region, increase the number of new connections to the pipeline and within the districts, reduce water losses and increase energy efficiency.
The project also aims to attract a private operator to manage the water and wastewater services on behalf of the joint operating company, which will result in more efficient services.
Signing the transaction in Chisinau, EBRD Director for Municipal and Environmental Infrastructure, Jean-Patrick Marquet, said: “I am delighted that the EBRD financing will help improve the quality of life for nearly 190,000 people in northern Moldova where such basic needs as access to water and wastewater services are not always met. It is very important to unify services under a single regional water company in order to cut operating costs and increase efficiency. As a further step, a private sector operator will be sought in 2015 to further enhance operating efficiency.”
Anatol Arapu, Moldovan Finance Minister, said: “All towns and villages in northen Moldova, apart from Soroca and Bălți, only have access to poor quality water. The EBRD, EIB and NIF financing will help modernise the existing Soroca-Balti pipeline built back in 1980s and will expand and rehabilitate the water infrastructure networks in the project districts, which will improve the standard of living in the region by providing residents with access to safe water and wastewater services. We are pleased that the loan agreement signed today will also pave the way for a viable regional operator in the north of Moldova.”
Enhancing the commercialisation and sustainability of municipal enterprises, including water utilities, is among the EBRD’s top priorities in Moldova, which were set out in its recently approved strategy for 2014-2017.
The EBRD is the largest foreign investor in Moldova. To date, the Bank has invested about €900 million in over 100 successful projects, covering the energy, transport, agribusiness, general industry and banking sectors.