Moldova borrows €10m from EBRD to modernize water utilities

The European Bank for Reconstruction and Development (EBRD) will provide a €10 million sovereign loan to Moldova to co-finance the water utilities development program. The agreement was signed by Minister of Finance Veaceslav Negruta and EBRD Managing Director for Infrastructure Thomas Meier on June 16. With a total cost of €30 million, the program is co-financed by a €10 million loan from the European Investment Bank and a €10 million grant from the EU’s Neighborhood Investment Facility (NIF). The EBRD is providing an additional €2 million in technical assistance grants to assist the project’s implementation, Info-Prim Neo reports, quoting a communique from the EBRD. The proceeds of the EBRD loan will be on-lent to the water companies in six reform-minded localities – Floresti, Soroca, Hancesti, Orhei, Leova and Ceadar-Lunga, to finance the upgrade and the extension of the water and wastewater systems in these towns. The project will support the participating companies in expanding their operations into neighbouring localities and help them become viable regional operators. In addition the participating utilities will expand the water supply systems and wastewater collection to neighbouring villages. The program will facilitate the access to safe drinking water in approximately 40 towns and villages, reduce pollution and contribute to the improvement of public health. “Supporting public infrastructure projects, particularly in the water sector outside the capital Chisinau is one of the EBRD’s priorities in Moldova. This important program will bring significant service improvements and health benefits to the population in the suburban regions and will help water companies become efficient regional business operators,” said Thomas Maier. The Ministry of the Environment will monitor the implementation of the program. Minister Gheorghe Salaru said the EBRD has worked in the six towns for a period and the population there will enjoy improved water supply services in about a year. “The current state of the water supply and wastewater infrastructure in Moldova is extremely precarious and the Moldovan government has asked international lenders to help address the problem by financing modernisation of water services”, said Veaceslav Negruta “We are highly appreciative of the support and assistance provided by the EBRD throughout its activity in Moldova for the implementation of strategic projects. We hope to continue our cooperation with the Bank to ensure Moldova’s sustainable development.” The loan is repayable in 15 years, with a grace period of three years. The interest rate is EURIBOR+1%.