The proposed project involves the construction of water and wastewater projects in Wroclaw, Poland. The main investment is the rehabilitation and upgrade of an existing water treatment facility. The Project will involve transferring a portion of a prior Bank loan for the Wroclaw multi-sector municipal infrastructure project. The project will finance the rehabilitation and upgrade of a water treatment plant and other improvements to the water and wastewater system. The financing structure is intended to increase the corporatisation of MPWiK and place capital financing responsibility with the Company and water and wastewater consumers. The project components will improve the drinking water quality in the City and together with the other project components co-financed by the EU ISPA programme, improve the water quality in the Odra River basin.
The project will promote the market use of water utility revenue-backed financing, especially through syndication with commercial banks. A municipal support agreement to be signed with the City will help consolidate the Bank’s role in fostering transition benefits in the water sector relating to cost-recovery financing for environmental projects, improved corporate governance, and remuneration incentives for performance improvement. The project will also support development of outsourcing of specialised water services, with associated demonstration effect.
Miejskie Przedsiebiorstowo Wodociagow I Kanaliszcji spolka z o.o. we Wroclawiu (MPWiK) is the municipally-owned water and wastewater utility company in Wroclaw, Poland. MPWiK provides drinking water and wastewater treatment services to over 600,000 people in Wroclaw. The company has a managing board and a supervisory board appointed by the City of Wroclaw.
The investment will take the form of a €18 million senior loan to MPWiK with a final maturity of 12 years. The loan will replace an existing loan that the Bank has made to the City of Wroclaw. The Bank plans to syndicate a portion of the loan to one or more commercial banks. The Project is part of a larger capital investment programme co-financed with EU ISPA funding.
€18 million or PLN equivalent.
The project has been classified B/0, requiring an environmental analysis of the proposed investment programme in water and waste water sectors.
The analysis did not identify any significant environmental issues associated with the proposed project. The project is expected to bring significant environmental benefits:
bringing about compliance with EU environmental directives, in particular the Urban Waste Water Directive;
extending sewerage services to 40,000 people currently not served; and
improving the quality of drinking water with associated health and sanitation benefits.
The Bank has provided Technical Cooperation assistance to the City under past projects, funded by the Japanese and Netherlands governments. It is anticipated that there may be additional TC programmes for the Company under this Project.
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