The financial instrument for Development of the Water Sector

The financial instrument for Development of the Water Sector is financed under Operational Programme Environment 2014-2020 (OPE) which is co-financed by the European Union in the framework of the cohesion policy, and the national budget.

The Fund of Funds has signed an operational agreement with the European Bank for Reconstruction and Development (EBRD) and has provided the bank with public resources in the amount of EUR 115 million (BGN 225 milion), with at least a matching amount of additional resources mobilised on the part of the EBRD. Thus the amount to be made available to final recipients will reach EUR 230 million (BGN 450 milion).

The financial instrument is designed to support investment in the water and wastewater sector in Bulgaria. The Fund of Funds’ intermediary of choice is the EBRD because it is an international financial institution with extensive experience in financing infrastructure projects, including in the water sector in the region.

Support will be made available by way of long-term lending to Water and Wastewater Operators (WWOs), as well as loan guarantees for commercial banks, to finance eligible WWO projects. The maximum loan term is 15 years, with a grace period of up to 3 years.

The financial instrument (FI) aims to top up the grant support provided by OPE as financing for eligible projects run by the Water and Wastewater Operators. Financing through the FI is expected to cover up to 20 % of total project costs.

Currently, companies in the sector are being consolidated in a major effort to improve the performance of Water and Wastewater Operators, and it is expected to bring down their number to one operator per administrative district. This FI is targeted at the companies that have already been consolidated.

In addition, there will be funding available for technical assistance and streamlining WWO operations, to improve their efficiency and financial health. Another factor ensuring the successful implementation of the instrument is the impressive experience of the EBRD, which the FoF selected as the financial intermediary, in structuring and financing projects in the sector.

The Financial Instrument for Development the Water Sector will contribute to improving the environment as well. Future investments take account of the plans to cut water losses, in consideration of investment plans for the reconstruction and upgrade of old infrastructure. Implementing the financed projects will contribute to achieving compliance with EU environmental law .

Current stage of the instrument: Already active on the market.

Contact information for the financial intermediary: 

European Bank for Reconstruction and Development

Address: 17, Moskovska Str., Sofia, Bulgaria

Tel: +359 2 9321 414