A loan of up to EUR 8.7 million to Rousse Water Supply and Sanitation Company, 51 per cent state / 49 per cent municipal-owned company, sole provider of water supply, waste water collection and treatment services in Rousse region.
The proceeds of the loan are used for co-financing priority investments in water supply and sanitation infrastructure, jointly with investment grants under Operational Programme Environment 2014-2020, or the EU Investment Project, as well as for funding a project for rehabilitation of a water supply main, or the Rehabilitation Project. The EU Investment Project is financed with the EBRD's own capital recourse and funds from the European Structural and Investment Funds and the national budget of the Republic of Bulgaria (jointly referred to as ESIF contributions), while the Rehabilitation Project is fully funded by the Bank.
The main objectives of both projects are: (a) reduction of non-revenue water and provision of constant water supply to all end users, hence fulfilling requirements of EU Directives 98/83/EC (Drinking Water Directive) and (b) connecting additional population to waste water services and treatment infrastructure, thus reaching compliance with EU Directive 91/271/EEC (EU Waste Water Treatment Directive).
ETI score: 60
The Transition Impact stems from the strong environmental benefits of the projects (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 AND SEWAGE COMPANY OF THE CITY OF ROUSSE
The company is the sole provider of water supply and sanitation services for roughly 250,000 inhabitants from 8 municipalities (Rousse, Slivo Pole, Ivanovo, Vetovo, Dve Mogili, Borovo, Byala and Tzenovo).
The company has signed a 15-year public service contract (PSC) with the Regional Water Supply and Sanitation Association, a non-profit organisation, 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
Total loan amounts to EUR 8.7 million, of which up to EUR 5.9 million, funded by the EBRD and up to EUR 2.8 million, funded with ESIF contributions (ESIF tranche). The ESIF financial resources are being managed by the EBRD pursuant to the Operational Agreement (OA) between the Bank and the Fund Manager of Financial Instruments in Bulgaria signed in October 2018.
Total Project Cost
The EU Investment Project will be majority-financed with EU investment grants and co-financed by the proceeds from the loan. The Rehabilitation Project will be funded entirely by the EBRD.
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.
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 Advisory.
- The company benefits from a TC for financial and operational improvement, which supports 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
Eng. Sava Savov, General Manager
6 Dobrudzha str., 7000 Rousse, Bulgaria
PSD last updated
04 Feb 2020
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Independent Project Accountability Mechanism (IPAM)
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