Bydgoszcz Water Revenue Bond



Project number:


Business sector:

Municipal and environmental infrastructure

Notice type:


Environmental category:


Approval date:

20 Sep 2005



PSD disclosed:

10 Mar 2005

Project Description

The proposed project will provide the Client, Bydgoszcz Water Company (MWiK) with long term financing enabling consolidation and improvements of the water and sewerage system in Bydgoszcz. The financing will come from a European Union Cohesion Fund grant and revenue bonds issued by the Client, of which the EBRD will purchase up to 50%.

Transition Impact

The proposed transaction will enable commercial investors (pension funds and life insurance companies) to finance municipal infrastructure projects in Poland, in what is now a difficult financial environment. Despite their interest in long-term and relatively safe investments, these investors did not have ample opportunity to invest in infrastructure projects so far and the current financial crisis constrains investors’ appetite. The participation of EBRD in the issuance of Bydgoszcz revenue bonds of the second series (the Bydgoszcz Bonds issue of the first series is considered to be a show case transaction of the type on the Polish market) will contribute to consolidate commercial investors’ appetite and facilitate the issuance of the revenue bonds.

The Client

Miejskie Wodociagi i Kanalizacja w Bydgoszczy (MWiK). A Water Company owned by the City of Bydgoszcz, one of the ten largest cities in Poland. The company has been established in 1990 and is currently successfully implementing the EU ISPA/Cohesion Fund/Revenue Bond financed Bydgoszcz Water Services Improvement Project.

EBRD Finance

Purchase of Revenue Bonds up to EUR 35 million. The remainder of the bonds would be purchased by pension funds and other institutional investors, mostly from Poland. The bonds will have a maturity of 19 years and a strong security package as envisaged by the Polish Law on Bonds.

In 2004 the European Union has approved an investment grant for this project of EUR 99 million.

The balance of the funds will be provided by the Client from internally generated cash flow.


Project Cost

Total project cost is EUR 141 million.

Environmental Impact

Screening categories and rationale for classification

The proposed project has been screened B under the 2008 Environmental and Social Policy. This is a follow on project, from the one approved by the Bank in 2005, which was subject to full environmental and social due diligence in line with the 2003 Environmental Policy.

Participation in the purchase of revenue bonds is not associated with significant environmental issues. The proposed priority investment programme has been duly implemented by the Company with adequate management of all environmental and social impacts associated with the sub-projects under the programme.

Information reviewed during the environmental appraisal

  • Environmental Impact Assessment of Bydgoszcz Programme for Rehabilitation and Reclamation of Water and Sewerage System prepared by DSC Consulting in July 2004.
  • Environmental Audit of the Kapusciska Water Company p[prepared by DHV in September 2003.
  • Annual environmental reporting since signing of the original project.
  • Additional information is currently under preparation by the Company to fully address all issues resulting from the need to comply with the Performance Requirements (PRs) under the 2008 Environmental and Social Policy.

Environmental Impacts and mitigation measures

The proposed investment programme is associated with limited adverse environmental impacts and has already resulted in significant environmental benefits. An environmental analysis of the proposed investment programme has been carried out as part of the feasibility study. Environmental impacts during construction and operation phases have been assessed for each project component, with mitigation measures proposed for inclusion in the designs. The Company has duly implemented all the actions agreed with the Bank in association with the previous transaction and fully complies with Polish regulatory requirements and EU environmental, health and safety standards.

A review is currently under way to benchmark the Company’s performance against 2008 Environmental and Social Policy and its PRs. In case, the Company needs to further improve its performance to fully comply with the PRs, an appropriate Environmental Action Plan will be agreed with the Company as part of the current project.

Environmental opportunities

The proposed project is bringing significant environmental benefits, including improved drinking water quality, protection of surface water and groundwater sources, improved treatment of municipal waste water and storm water, connection of 15,000 people to the sewerage system and improved treatment and disposal of sewage sludge. As a result of the Project implementation, the Company will achieve compliance with Polish and EU environmental standards and regulations.


The Bank will continue to monitor the project’s compliance with the applicable environmental and social requirements during the lifetime of the project by reviewing annual environmental reports (AERs) prepared for the project covering:

(i) ongoing performance of project-specific environmental, health and safety activities as reflected in the results of periodic and quantitative sampling and measuring programmes

(ii) the status of implementation of environmental mitigation and improvement measures. The Bank’s representatives will also conduct periodic site supervision visits when deemed appropriate.

Technical Cooperation

Currently none
One commitment for €130,919 against OPID 31203.
Commitment Name: Bydgoszcz Water Consolidation - Kapusciska Due Diligence
Commitment Number: ECP2000-2002-12-08/04
Fund Approved Date: 28/07/03
Commitment Amount: €130,919
Disbursement Amount: €119,578
Fund Name: EU-EBRD Cooperation Agreement, Bangkok Facility (PHARE programme)


Business opportunities

For business opportunities or procurement, contact the client company.

For state-sector projects, visit EBRD Procurement: Tel: +44 20 7338 6794

General enquiries

EBRD project enquiries not related to procurement:
Tel: +44 20 7338 7168

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