The proposed project will enable United Utilities B.V., an indirect subsidiary of United Utilities plc, to acquire current shareholding in three water utility companies - Sofijska Voda AD in Bulgaria, AS Tallinna Vesi in Estonia and Przedsiebiorstwo Komunalne Aqua Bielsko-Biala S.A in Poland - from its existing strategic partner International Water Ltd and to potentially acquire further shares in the above-mentioned Polish water utility from the Municipality of Bielsko-Biala.
The key transition is derived from sustaining the initial transition impact achieved through privatisation, where the some of the current investors no longer have a strategic interest in the water sector in Central and Eastern Europe and are unlikely to foster further development of the project companies. The sale of their shares to the co-shareholder United Utilities B.V., who is interested in the further development and long-term sustainability of the project companies and already has considerable Eastern European experience, would further the transition impact already achieved. In the case of Przedsiebiorstwo Komunalne Aqua Bielsko-Biala S.A, transition will be enhanced as the project directly facilitates the additional share purchase in Aqua Bielsko-Biala thus promoting further public-private partnership and commercialisation.
United Utilities Europe Holdings B.V, a company organised and existing under the laws of the Netherlands and an indirect subsidiary of United Utilities plc., a publicly listed company on the London Stock Exchange.
The facility will consist of:
the purchase of shares of up to 50% of United Utilities Europe's capital and voting rights; and
potential subscription of new shares in United Utilities Europe if further shares in the Przedsiebiorstwo Komunalne Aqua Bielsko-Biala S.A are acquired from the Municipality of Bielsko-Biala.
Amount to be determined.
To be determined.
The project was screened C/1. Environmental and health and safety (EHS) performance and regulatory compliance of the three project companies have been reviewed to identify and assess any liabilities resulting from past operations and investment needs to meet increasingly stringent environmental performance requirements for water utilities following EU accession or harmonisation of EU legislation. The reviews of AS Tallinna Vesi and Sofijska Voda AD, to which the Bank is already a lender, made use of the existing information the Bank has obtained during the previous operations as well as the utilities' annual environmental reporting to the Bank. Przedsiebiorstwo Komunalne Aqua Bielsko-Biala S.A (Aqua) review was based on the Business Plan for 2003 - 2011, an analysis of Aqua's environmental compliance, including a comparison of Aqua's performance in 2002 with Polish and EU standards, and information available on Aqua's website.
The investigations showed that all three project companies are either already in compliance with national and EU EHS standards, or have adopted an action programme to meet those within an acceptable timeframe and that they have adopted investment programmes, which include a number of environmental improvement and efficiency enhancement measures. The Bank will continue monitoring AS Tallinna Vesi and Sofijska Voda AD's progress in environmental performance and in the implementation of the EHS action plans through annual environmental reporting and, in the case of Aqua, through annually updated business plan.
There is no new TC funding. The existing operations have already benefited from substantial TC funding:
Sofia Water: Total of over €1 million in project preparation and implementation support from the EU Phare programme and from UK Department for international development (DFID). Specifically: (i) MEI Project Preparation Support: Phare Framework Contract - Sofia Concession Project - EU Phare 1998 Annual Programme; (ii) Sofia water supply improvement - €109,904 EC Phare 1996; (iii) Sofia water and waste water - Concession Referee Board €22,767 EC Phare 1996; (iv) Sofia water and wastewater - assistance to the Bank in the review and assessment of tender documents - €23,475 EC Phare 1996; (v) Sofia water supply improvement project - 3 separate assignments with the same name totalling €800 EC Phare 1997 and 1998; (vi) Technical Assistance for the Preparation of the Terms of Reference for the Concession Monitoring Unit for the Municipality of Sofia €31,000 EC Phare 1999; (vii) Sofia water supply improvement project €25,000 UK - DFID fund for Central Europe 1999.
AS Tallinna Vesi: (i) Tallinn water review of investment programme, borrowing requirements and performance €41,509 EC Phare 1998; and (ii) Tallinn Water Benchmarking Study €30,819 EC Phare 1998.
Przedsiebiorstwo Komunalne Aqua Bielsko-Biala S.A: Poland Water Sector Benchmarking Study €133 174 UK DFID 1999.
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