Provision of a loan of up to EUR 32.4 million to Burgas Water Supply and Sanitation Operator ("Burgas WSSO" or the "company"), a state-owned company and sole provider of water supply, wastewater collection and treatment services in the Burgas region. The proceeds of the loan will be used for the co-financing of priority investments in water supply and sanitation infrastructure, jointly with investment grants from Operational Programme Environment 2014 - 2020 ("OP Environment"). The project will be financed with EBRD's own capital resources and funds from the European Structural and Investment Funds and the national budget of the Republic of Bulgaria (jointly referred to as "ESIF contribution").
The project's main objectives are (i) increasing compliance with the EU directives on potable water and wastewater treatment in large agglomerations (above 10,000 population equivalent) and (ii) enhancing Burgas WSSO's operational efficiency.
The project's Transition Impact stems from its strong environmental benefits (improving efficiency, reducing water losses and connecting more people to centralised sewage and wastewater treatment in compliance with EU Directives) and 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 AND SEWAGE COMPANY OF THE CITY OF BURGAS
Burgas WSSO is the sole provider of water supply and sanitation services for roughly 415,000 inhabitants in 13 municipalities (Aytos, Burgas, Kameno, Karnobat, Malko Tarnovo, Nessebar, Pomorie, Primorsko, Ruen, Sozopol, Sredets, Sungurlare and Tsarevo) in the region. In addition, the company is providing services to approximately 300,000 tourists per day during the peak summer season.
The company has signed a 15-year public service contract ("PSC") with the Regional Water Supply and Sanitation Association, representing the owners of the water supply and sanitation infrastructure, i.e. the state and the municipalities in the region. The PSC gives the company the exclusive right to provide services in the region and collect revenues from the end consumers.
EBRD Finance Summary
EBRD's total financing will amount to up to EUR 32.4 million, of which EUR 19.4 million will be funded by EBRD's ordinary capital resources (the "EBRD Tranche") and EUR 13 million will come as ESIF contributions (the "ESIF Tranche").
The ESIF financial resources are managed by the EBRD pursuant to an Operational Agreement between the Bank and the Fund Manager of Financial Instruments in Bulgaria signed in October 2018.
Total Project Cost
The cost of the project's investment is estimated at EUR 216.7 million excluding VAT and will be majority financed with investment grants from the OP Environment, complemented by the company's own funds and the EBRD loan.
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 for the proper implementation of the project.
Environmental and Social Summary
The Project is categorised B in accordance with EBRD's 2019 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. The environmental and social due diligence ("ESDD") will include a review of compliance with national legislation, relevant EU standards and directives, and the Bank's Performance Requirements ("PRs"), it will also review the potential for permanent or temporary resettlement and appropriate mitigation. ESDD will be undertaken as part of the Feasibility Study by independent TC funded consultants, and the identified risks will be mitigated via an Environmental and Social Action Plan for the Project. This section will be updated upon completion of the environmental and social due diligence.
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 form the OP Environment and EBRD's Shareholders Special Fund.
Company Contact Information
Eng. Gancho Tenev, Executive Director
00359 56 871 444
00359 56 842 979
3 Gen. Vladimir Vazov Str. 8000 Burgas, Bulgaria
PSD last updated
09 Oct 2020
Further information regarding the EBRD’s approach to measuring transition impact is available here.
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Environmental and Social Policy (ESP)
The ESP and the associated Performance Requirements (PRs) set out the ways in which the EBRD implements its commitment to promoting “environmentally sound and sustainable development”. The ESP and the PRs include specific provisions for clients to comply with the applicable requirements of national laws on public information and consultation as well as to establish a grievance mechanism to receive and facilitate resolution of stakeholders’ concerns and grievances, in particular, about environmental and social performance of the client and the project. Proportionate to the nature and scale of a project’s environmental and social risks and impacts, the EBRD additionally requires its clients to disclose information, as appropriate, about the risks and impacts arising from projects or to undertake meaningful consultation with stakeholders and consider and respond to their feedback.
More information on the EBRD’s practices in this regard is set out in the ESP.
Integrity and Compliance
The EBRD's Office of the Chief Compliance Officer (OCCO) promotes good governance and ensures that the highest standards of integrity are applied to all activities of the Bank in accordance with international best practice. Integrity due diligence is conducted on all Bank clients to ensure that projects do not present unacceptable integrity or reputational risks to the Bank. The Bank believes that identifying and resolving issues at the project assessment approval stages is the most effective means of ensuring the integrity of Bank transactions. OCCO plays a key role in these protective efforts, and also helps to monitor integrity risks in projects post-investment.
OCCO is also responsible for investigating allegations of fraud, corruption and misconduct in EBRD-financed projects. Anyone, both within or outside the Bank, who suspects fraud or corruption should submit a written report to the Chief Compliance Officer by email to email@example.com. All matters reported will be handled by OCCO for follow-up. All reports, including anonymous ones, will be reviewed. Reports can be made in any language of the Bank or of the Bank's countries of operation. The information provided must be made in good faith.
Access to Information Policy (AIP)
The AIP sets out how the EBRD discloses information and consults with its stakeholders so as to promote better awareness and understanding of its strategies, policies and operations following its entry into force on 1 January 2020. Please visit the Access to Information Policy page to find out what information is available from the EBRD website.
Specific requests for information can be made using the EBRD Enquiries form.
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).
IPAM independently reviews Project issues that are believed to have caused (or to be likely to cause) harm. The purpose of the Mechanism is: to support dialogue between Project stakeholders to resolve environmental, social and public disclosure issues; to determine whether the Bank has complied with its Environmental and Social Policy or Project-specific provisions of its Access to Information Policy; and where applicable, to address any existing non-compliance with these policies, while preventing future non-compliance by the Bank.
Please visit the Independent Project Accountability Mechanism webpage to find out how to submit a Request for review through our confidential online form, by email, mail or telephone. IPAM is available to discuss your concerns and answer any questions you may have about the submission or handling of Requests, which follow the Project Accountability Policy and Guidance. Requesters’ identities may be kept confidential, upon request.