Provision of a loan of up to EUR 12.6 million to Sliven Water Supply and Sanitation Company ("Sliven WSSC" or the "Company"), a water utility serving Sliven Region. The loan proceeds will be used to co-finance, alongside investment grants from the EU "Operational Programme Environment" 2014-2020 ("OP Environment"), the rehabilitation and upgrade of water and wastewater infrastructure in two agglomerations of above 10,000 population equivalent in the region, i.e. Sliven and Nova Zagora (the "Project").
The loan will be funded by EBRD capital resources, with a guarantee from the European Structural and Investment Funds (the "ESIF guarantee").
The project's main objectives are: (i) to help the Company increase compliance with EU directives on potable water and wastewater treatment in large agglomerations and (ii) to improve Sliven WSSC's operational efficiency.
ETI score: 60
The Transition Impact of the investment stems from:
- The Project's Green quality, via: (i) annual potable water savings, (ii) increased share of population connected to sewerage system and to centralized wastewater treatment;
- The Project's Resilient quality via: (i) reduced dependence on full grant-based financing of capital expenditure and (ii) strengthened financial and operational performance and asset management practices.
WATER AND SEWAGE COMPANY OF THE CITY OF SLIVEN
Sliven Water Supply and Sanitation Company, a 91 per cent state owned through the Bulgarian Water Holding, 6 per cent owned by Sliven municipality and the rest 3 per cent owned from the other municipalities in Sliven region utility company, is the sole provider of water supply and sanitation services to roughly 183,000 inhabitants in Sliven Region. The Company has signed a 15-year Public Service Contract with the Regional Water Supply and Sanitation Association, which gives it the exclusive right to provide services in the region and collect revenues from end consumers.
EBRD Finance Summary
The total financing of the Project will amount to up to EUR 12.6 million, funded with EBRD's ordinary capital resources. The loan is expected to benefit from the ESIF guarantee, covering 80 per cent of the total loan amount, issued by the Fund Manager of Financial Instruments in Bulgaria.
Total Project Cost
The total cost of the Project is estimated at EUR 61.4 million, excluding VAT and working capital and will be majority financed with investment grants from the EU's OP Environment.
The EBRD offers financing not available in the market, e.g. tenor above market average and an innovative financing structure on commercial terms, which is necessary to structure the project. EBRD's involvement and expertise will mobilise the necessary resources to support improving the Company's long term creditworthiness as well as project implementation.
Environmental and Social Summary
Categorised B (2019 ESP). Environmental and Social Due Diligence (ESDD) for the Project under the ESIF/EBRD Water and Waste Water Financing Framework is being carried out as part of the Feasibility Study by independent consultants. It will include a review of the environmental & social management capacity and performance of the Sliven Regional Water Operator, a review of the EU application conditions, an assessment of the Project's potential E&S impacts; the scope for mitigation and/or management of the Project's E&S impacts and ability to comply with the Bank's PRs and with national and EU requirements. The ESDD reports are due in early October 2022 and this PSD will be updated then with the results and summary of any action plan.
Technical Cooperation and Grant Financing
Pre-signing TC covers the following activities: (1) technical and operational review of the Projects; (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) confirming Projects' compliance with EBRD's Green Economy Transition framework. The TC is funded by the EBRD's Sustainable Infrastructure Policy and Project Preparation.
The Company is expected to benefit from a TC for financial and operational improvement to support the Company in strengthening its operations and financial performance and long-term debt service capacity. The budget will be potentially financed by funds from EBRD's Shareholders Special Fund.
Company Contact Information
Eng. Sevdalin Rashev, General Manager
00359 886 46 40 88
00359 044 623 413
27 "6-ti September" Str. 8800 Sliven, Bulgaria
PSD last updated
13 Sep 2022
Further information regarding the EBRD’s approach to measuring transition impact is available here.
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Independent Project Accountability Mechanism (IPAM)
If efforts to address environmental, social or public disclosure concerns with the Client or the Bank are unsuccessful (e.g. through the Client’s Project-level grievance mechanism or through direct engagement with Bank management), individuals and organisations may seek to address their concerns through the EBRD’s Independent Project Accountability Mechanism (IPAM).
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