New investment project for water and sanitation services in Smolyan, Bulgaria

Improved water and wastewater services will be developed in Bulgaria’s Smolyan region under a new investment project financed by the European Bank for Reconstruction and Development (EBRD) and co-financed by the European Union. 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 EBRD and EUR 2,7 million from the EU’s European Structural and Investment Funds (ESIF). EU will further co-finance the investment with EUR 34,8 million in grants.

The project will help reduce the consequences of the COVID-19 pandemic in Bulgaria, where water infrastructure providers are facing significant financial constraints. The investment in Smolyan is 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 project will modernise and extend municipal services for nearly 100 000 people in the Smolyan district in accordance with EU directives. The investment will reduce potable water losses, increase the share of the population connected to the sewer system to 99%, and increase the volume of wastewater treated before being discharged. Through technical cooperation the project will also promote better management of municipal assets, and help strengthen the financial and operational performance.

According to EBRD: “The coronavirus pandemic has exhibited the significance of cleanliness and sanitation, which can’t be accomplished without top notch water and wastewater framework. The arrangement of clean drinking water and compelling sanitation stay basic utility services for protecting human wellbeing and the earth considerably after nations pass the peak of the pandemic.”

The Fund Manager of Financial Instruments in Bulgaria (FMFIB) chose 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 recently approved a five-year investment strategy to support sustainable infrastructure development through regional connectivity, green municipal solutions, decarbonisation and resource efficiency as priorities. 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 caused by the pandemic and focus on their key function.