A project summary document by the European Bank for Reconstruction and Development revealed a EUR 4.5 million loan is in preparation for the Municipality of Visoko in Bosnia and Herzegovina to expand water supply. The target for the decision by the board, pending final review, is July 20.
The project aims to enable connection of new consumers and improve living standards of the population in the area in the central part of the country, 30 kilometres north of capital Sarajevo. Another objective is to cut water losses, improve resilience to climate change and improve quality of supply to existing customers. The municipality has 41,000 residents in 13,000 according to the latest census data, EBRD said.
Elimination of cross-subsidies, implementation of cost-recovery principles and cost-effective business performance by the local utility make the main transition impact rationale, according to the document. Separation of water and wastewater activities from solid waste management and from maintenance of public areas will be assessed through the feasibility study. Setting standards for corporate governance and business conduct is included in the transition impact.
The project costs an overall EUR 6 million. Technical cooperation before signing includes a currently ongoing project appraisal assignment, financed with EUR 74,480 by Germany, to include engineering review of the design documentation. The EBRD Shareholder Special Fund (SSF) provided EUR 50,000 of advanced procurement support. Implementation support will consist of EUR 300,000, proposed to be financed by an international donor or the SSF, for assistance with contact administration and supervision. Another EUR 150,000 is needed for assisting the company to prepare and implement legal separation operations, to prepare and sign a public service contract (PSC) and a long-term business plan.
