ESIF: Stara Zagora Water Subproject



Project number:


Business sector:

Municipal and environmental infrastructure

Notice type:


Environmental category:


Approval date:

21 Jul 2020



PSD disclosed:

29 Jul 2019

Project Description

Provision of a loan of up to EUR 7 million to Stara Zagora Water Supply and Sanitation Company ("Company"), a water utility serving the region of Stara Zagora. The Company is 100 per cent stateowned through the Ministry of Regional Development and Public Works.

The loan will be funded by EBRD capital resources and the European Structural and Investment Funds and the national budget of the Republic of Bulgaria (jointly referred as "ESIF contributions").

The ESIF contributions are earmarked to be used in the form of repayable financial instruments.

The proceeds of the loan will finance the rehabilitation of the water supply system and wastewater collection infrastructure serving the region of Stara Zagora, jointly with investment grants from the EU
"Operational Programme Environment" 2014-2020 (the "Project").

Project Objectives

The main objectives of the Project are: (a) to help the Company achieve compliance with the EU Urban Waste Water Treatment Directive in all agglomerations of more than 10,000 people serviced by the Company and (b) to improve the efficiency of water supply services, reduce the share of nonrevenue water and fulfil the requirements of the EU Drinking Water Directive.

Transition Impact


The Transition Impact stems from the Project's strong environmental benefits (reducing water losses, connecting more people to centralised sewage and waste water treatment, and introducing wastewater treatment in compliance with EU Directives), the reduced dependence on full grantbased financing of investments as well as the strengthening of the Company's financial and operational performance through technical cooperation (TC).

Client Information


Stara Zagora Water Supply and Sanitation Company is a state-owned utility that provides water and sanitation services to 12 municipalities in the region of Stara Zagora with approximately 300 thousand inhabitants.

EBRD Finance Summary

EUR 4,100,000.00

The loan will amount to EUR 7 million, of which EUR 4.1 million will be funded by EBRD's ordinary capital resources (the "EBRD Tranche") and EUR 2.9 million in ESIF contributions from the EBRDEU Special Fund (the "ESIF Tranche").

The ESIF financial resources are being managed by the Bank and the Fund Manager of Financial Instruments in Bulgaria ("FMFIB") signed in October 2018.

Total Project Cost

EUR 50,500,000.00

The total project costs will be majority-financed with EU investment grants and co-financed with the proceeds of the loan.

Environmental and Social Summary

The Project is categorised B in accordance with the 2014 Environmental and Social Policy. The key environmental and social ("E&S") risks and impacts will be mainly construction related: particularly health and safety of workers and public during excavation activities; temporary restrictions of access; increased noise, dust and vibration levels; and contractor management. The environmental and social due diligence will be undertaken by TC funded consultants and will include a review of compliance with national legislation, EU standards, including the drinking water directive, and the Bank's PRs. It will also review the potential for permanent or temporary resettlement and appropriate mitigation.

Depending on the results of E&S due diligence and resulting recommended mitigation measures the EBRD may need to agree additional requirements with Stara Zagora WSSO. A Non-Technical Summary (NTS), Stakeholder Engagement Plan (SEP) and ESAP will be developed.

This section will be revised with the results of the environmental and social due diligence.

Technical Cooperation

EBRD has envisaged the following donor-financed technical cooperation (TC) for the Project and the Company:

  • TC that cover the following activities: (1) technical and operational review of the Project; (2) analysis of the key contractual arrangements; (3) financial modelling and analysis; (4) environmental and social due diligence and gap analysis; (5) procurement review and (6) and Green Economy Transition ("GET") confirmation. This TC will be funded by EBRD's Sustainable Infrastructure Advisory.
  • TC for preparation of a diagnostic analysis of the Company and development of a financial and operational performance improvement programme aimed to strengthen the Company's operations and improve its long-term creditworthiness. This TC will be potentially financed with funding from the Operational Programme Environment 2014-2020.

Company Contact Information

Rumen Ralkov
00359 42 651 345
00359 42 651 345
62 Hristo Botev Street 6000 Stara Zagora

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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Text of the PIP

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