Provision of a long-term corporate loan of up to EUR 3 million to Vratsa Water Supply and Sanitation Company ("Vratsa WSSC" or the "Company), 51% state / 49% municipal-owned entity. The company is the sole provider of centralised water supply and sanitation ("WSS") services in Vratsa Region.
The proceeds of the loan, blended with investment grants from Operational Programme Environment 2014 - 2020 ("OPE"), will finance investments targeting rehabilitation of over 54 km of water distribution pipes and 26 km of sewerage network, acquisition of new equipment for a sewage pumping station and construction of 15 new water metering shafts, 5 pressure-reducing valves chambers and two storage sites for sludge, etc. In addition, complementary performance-enhancing measures are foreseen (e.g. integration of GIS and enhancing of SCADA systems). The project will be financed with EBRD's own capital and funds from the European Structural and Investment Funds ("ESIF") and the national budget of the Republic of Bulgaria (jointly referred to as "ESIF contributions").
The project's main objectives are (i) reaching compliance with the EU directives concerning potable water and waste water treatment in large agglomerations (above 10,000 population equivalent) and (ii) enhancing operational efficiency.
The Transition Impact stems from the strong environmental benefits of the project (improving efficiency, reducing water losses and connecting more people to centralised sewage and waste water treatment in compliance with EU Directives), the reduced dependence on full grant-based financing of investments as well as the strengthening of the Company's financial and operational performance through technical cooperation ("TC").
WATER SUPPLY AND SEWAGE COMPANY OF THE CITY OF VRATSA
Vratsa WSSC is providing centralised WSS services to 10 municipalities, comprising 8 towns and 115 villages, on the basis of a 15-year Public Service Contract ("PSC") with the Regional Water Supply and Sanitation Association. The PSC gives the Company the right to operate the publicly-owned infrastructure, provide WSS services and collect revenues. In return, the Company has committed to invest a total of EUR 3.8 million in the WSS network over a course of 15 years. The total population serviced by the Company is c. 172,000 people.
EBRD Finance Summary
Total loan amounts to EUR 3 million, of which up to EUR 1.5 million, funded by EBRD and up to EUR 1.5 million, funded with ESIF contributions. The ESIF financial resources are being managed by EBRD pursuant to the Operational Agreement between the Bank and the Fund Manager of Financial Instruments in Bulgaria signed in October 2018.
Total Project Cost
Environmental and Social Summary
The project is categorised B in accordance with the 2014 Environmental and Social Policy. The key environmental and social risks and impacts are 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. Permanent resettlement is not anticipated. The environmental and social due diligence will be undertaken by TC funded consultants and the identified risks will be mitigated via an Environmental and Social Action Plan for the project. This section will be revised with the results of the environmental and social due diligence.
• 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 Advisory.
• The Company will 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 form the Operational Programme Environment 2014-2020.
Company Contact Information
Angel Prestoyski, General Manager
2 Al. Stambolilyski str., 3000 Vratsa, Bulgaria
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