A total of EUR 230 million is to be invested to improve Bulgaria’s water supply and wastewater treatment from Bulgaria’s, the EU’s, and the European Bank for Reconstruction and Development’s (EBRD) sources.
The Fund Manager of Financial Instruments in Bulgaria (FMFIB), or Fund of Funds, has been set up by the Bulgarian state to structure and manage financial instruments co-financed by the European Structural and Investment Funds and the national budget. It currently manages over EUR 600 million under four operational programs.
Under a new agreement, the EBRD is awarded by the Fund of Funds to manage up to EUR 115 million provided for Bulgaria’s water sector development. In addition, the EBRD will contribute up to another EUR 115 million of its own funds, unlocking a total of EUR 230 million in financing for regional water operators, according to a news release from the EBRD.
The funds will be extended in the form of long-term loans to water and sewerage operators and guarantees to commercial banks providing loans to these companies. The maximum loan term is 15 years, with up to three years grace period.
Investments will support consolidated regional water operators to increase their efficiency and financial sustainability, rehabilitate obsolete infrastructure and reduce water losses. They will also help bring the Bulgarian water sector in line with EU environmental legislation.
The EUR 230 million managed by the EBRD are expected to complement, in the amount of up to 20%, investment grants from the EU’s Cohesion Fund. In the 2014-2020 period, over EUR 1 billion from the Operational Programme Environment, co-financed by the Cohesion Fund, will be invested in better water supply and water treatment in Bulgaria.
The EU’s Cohesion Fund aims to reduce economic and social disparities and promote sustainable development. The Operational Programme Environment is a multiannual program that funds projects which help preserve the environment, promote climate change adaption and risk prevention and management.
Corina Cretu, EU Commissioner for Regional Policy said: “This agreement shows that financial instruments have the power to multiply the benefits of Cohesion Policy investments, also in public services. Thanks to this agreement, 220,000 Bulgarian citizens will have access to better water supply and 1.5 million to improved waste water treatment.”