EBRD Support for Water Sector Projects

Arthur Schankler Senior Banker Priority Environmental Investment Programme (PEIP) National Workshop

Belgrade, 8 May 2008

The EBRD

 International financial institution established in 1991, promotes transition to market economies in 29 countries from central Europe to central Asia  Owned by 61 countries and two inter-governmental institutions    Serbia is shareholder Committed over € 26 billion to date Capital base of €20 billion

EBRD Targets in Enviromental Sector

 Water and wastewater sector – Water and sewer network rehabilitation and expansion – Wastewater treatment plants  Solid waste management – – Environmentally compliant landfills and equipment Duboko Project in Cacak-Uzice region  District heating – Generating facilities and distribution networks  Energy efficiency

Bank’s support for water sector

 Loans to five municipalities – Belgrade – No guarantee – Kragujevac – Sovereign guarantee – Nis – Sovereign guarantee – Novi Sad – Sovereign guarantee – Subotica – Sovereign guarantee

EBRD’s support for financing water sector capital investments

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Long-term loans up to 15 years

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Grace period (no principal payments) during construction period

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Floating or fixed Euro interest rates based on credit risk of borrower

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Potential step-downs in interest rates based on borrower performance

EBRD Financing Structures in the Water Sector

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Loans to municipalities with on-lending to water companies

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Loans to water companies with Municipal Support Agreements from municipalities

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Support for cost-recovery tariff increases or payments to the companies if tariffs cannot be increased

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Co-financing for grant-funded projects, e.g. NIP, EU, bi-lateral donors

EBRD’s Additional Support for Water Sector Investments

 Technical Cooperation (grant funding): – Project preparation, e.g. feasibility study – Financial and operating performance improvement – Project implementation  Potential grant funding assistance for capital investments – Western Balkans Fund (EBRD) – Infrastructure Project Facility (EU)

EBRD Basic Requirements

 Minimum loan size generally of EUR 5 million  Feasibility Study  Environmental Audit  Compliance with EBRD Procurement Rules  Creditworthiness of borrower

EBRD in Serbia: Contact

Mr. Arthur Schankler

[email protected]

Ms. Danijela Vukmirovic

[email protected]

Belgrade Resident Office

Bulevar Dr Zorana Djindjica 64a Tel. +381 11 2120 530; +381 2120 710 Fax. +381 11 2120 534