Up to 100 000 people in the Smolyan region in southern Bulgaria will benefit from access to improved water and wastewater services in line with European standards thanks to a European Reconstruction and Development Bank (EBRD) investment combined with other EU funds.
The EBRD is providing a loan of up to EUR 5.8 million to the Smolyan Water Supply and Sanitation Company. The financing comprises EUR 3.1 million from the EBRD and EUR 2.7 million from the EU’s European Structural and Investment Funds (ESIF). The EU will further co-finance the investment with EUR 34.8 million in grants.
The project will help to mitigate the consequences of the coronavirus (COVID-19) pandemic in Bulgaria, where vital infrastructure providers are under enormous pressure to deliver vital services while facing financial constraints. Support for infrastructure providers is a central pillar of the EBRD’s response to the crisis.
EBRD now expects to dedicate the entirety of its activities in the period 2020-21 to overcome the economic impact of the pandemic and is ready to invest up to EUR 21 billion.
As part of this effort, the Vital Infrastructure Support Programme will help key infrastructure providers – including state-owned enterprises, municipalities, and private utility operators – through a combination of short-term and long-term financial products to overcome the current shock and focus on their key function.
The EBRD stands ready to engage with infrastructure providers in Bulgaria and is available for financing projects.
Modernise and expand wastewater treatment capacity
The operation will modernise and extend municipal services in line with EU directives for the population of the Smolyan district. The investment will reduce potable water losses, increase the share of the population connected to the sewer system to 99 percent, and increase the volume of wastewater treated before being discharged.
The coronavirus pandemic has demonstrated the importance of hygiene and sanitation, which cannot be achieved without high-quality water and wastewater infrastructure. The provision of clean drinking water and effective sanitation remain critical utility services for safeguarding human health and the environment even after countries pass the peak of the crisis.
Through technical cooperation the project will also promote better management of municipal assets as well as help to strengthen the company’s financial and operational performance.
The investment in Smolyan is the EBRD’s second project under the ESIF Bulgarian Water Sector Framework. The programme was launched to co-finance strategic infrastructure investments that aim to comply with EU directives and address environmental issues and operational inefficiencies.
The Fund Manager of Financial Instruments in Bulgaria (FMFIB), or Fund of Funds, chose the EBRD to manage up to EUR 115 million from ESIF and the national budget to develop the water sector. In addition, the EBRD will contribute up to another EUR 80 million of its own finance, unlocking a total of about EUR 200 million for water operators.
EBRD is a major investor in Bulgaria. A recently approved five-year strategy identifies supporting sustainable infrastructure development through regional connectivity, green municipal solutions, decarbonisation and resource efficiency as priorities.
To date, the EBRD has invested almost EUR 4 billion in the Bulgarian economy.
