EBRD helps improve water supply in northwestern Romania: €18 million to help regionalisation of water utility in Oradea

Some 26,000 people living in northwestern Romania, near the Hungarian border, will benefit from cleaner water and reduced pollution as a result of a €18 million EBRD loan that will also extend the reach of the local water network.

The significant environmental benefits of the loan also include the reduction of cross-border groundwater pollution in the Crisul Repede River on the border between Hungary and Romania.

A €12 million portion of the loan will be used to co-finance the extension of the water and wastewater network in Oradea by constructing water and sewage pipes in parts of the city and 8 adjacent communities which are not currently connected to the network.

These investments will be the first step in the company’s transformation into a sustainable regional operator - one of the key criteria for eligibility for EU cohesion funds. An additional €200,000 of technical cooperation funds for consultancy services will assist the company in its regionalisation, achieving substantial efficiency gains and greater access to commercial capital.

The remaining €6 million portion of the loan will be used to restructure the original City-backed loan into a direct finance to the local utility without recourse to a sovereign guarantee. Of the total €18 million loan, €8 million will be syndicated to Raiffeisen Zentralbank Österreich Aktiengesellschaft.

The EBRD is a major investor in regional infrastructure including the water and waste-water sector projects in Romania, which have been identified as one of the highest priorities during Romania’s discussions on environment for its EU accession. This project is the third EBRD project with a regional water utility in Romania, following the signing of the projects in Cluj Salaj in 2005 and Timisoara in 2007.

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