On 20 May 2020, our partner under the Bulgarian Water Wastewater Sector Facility — the European Bank for Reconstruction and Development (EBRD) — signed an investment agreement with the Smolyan Water Utility Company.
The funds will be provided under a long-term loan intended to finance the construction of new and the reconstruction of existing water and wastewater infrastructure in Smolyan and the wider region, which includes 10 municipalities: Banite, Devin, Borino, Dospat, Zlatograd, Madan, Nedelino, Rudozem, Smolyan and Chepelare.
The funds will be disbursed on reducing water losses in the area and achieving compliance with the EU requirements for wastewater treatment, improving the quality of drinking water and increasing the efficiency of the water supply and sewerage services provided by the utility company.
With a total value of EUR 39.1 mln., project costs will be covered by Operational Programme Environment 2014—2020 and the investment loan of EUR 4.3 mln. provided by the Fund of Funds (FoF) and the EBRD.
The FoF will contribute EUR 2.7 mln. to the loan to complement EBRD financing in the amount of EUR 1.6 mln.
The provision of the loan aims to improve the financial performance of the Smolyan Water Utility Company and ensure the achievement of sustainable results in EU funds utilisation, lowering overall dependence on exclusively grant financing. The combination of the use of grant assistance and funds available under the financial instrument will make these investments more sustainable. The main focus will be on lowering costs and improving efficiency with the main target of improving service delivery and water quality for the benefit of local residents.
The loan agreed is the second joint FoF/EBRD investment under the Water and Waster Water Facility after the initial investment in the Ruse Water Utility Company. The funds will be made available under Operational Programme Environment 2014-2020, co-financed by the European Structural and Investment Funds (ESIF).
It is expected that several other investment loan agreements with water operators in Bulgaria with FoF support will be signed by the end of the year.
