EBRD/ DANILOVGRAD MUNICIPAL INFRASTRUCTURE PROJECT

Project Description

The EBRD is considering providing a sovereign loan of up to €5.35 million to finance the construction of a wastewater collection system and treatment plant and modernisation of the water supply system in Danilovgrad.
The objective of the Project is to improve the water supply and wastewater situation in the area of Danilovgrad Municipality by the construction of new or rehabilitation of existing assets and improved management of the existing systems to comply with municipal and national environmental requirements. The over-riding drivers of the project are to fulfil the requirement of the municipality to comply with relevant national legislation which is aligned with EU directive requirements and treat wastewater before it is discharged to the Zeta River, improve the water supply system and reduce water losses.  

Transition Impact

The proposed Project is expected to result in transition impact in the following areas:
- Restructuring and Commercialisation through creation of a water and wastewater entity separate from other utility services, revision of the organisational structure, improvements in the revenue collection procedures, reduction in technical losses and associated costs through the implementation of investments in physical assets, improvements in the environmental management; and improvements in customer relations.
- Transfer of Skills: Involvement of international consultants under the TC assignments will provide the Municipality and the Company with a training-on-the-job access to international financial, corporate, managerial, procurement and engineering skills and knowledge transfer.
- Setting standards for corporate governance: The Company will apply internationally accepted accounting standards (IFRS). The Financial and Operational Performance Improvement Programme (FOPIP) will be implemented with a focus on cost reductions and efficiency gains.
- Demonstration of new replicable behaviour and activities: The project will demonstrate to other municipalities and the Government how to prepare projects on operating, maintenance and depreciation cost recovery basis.


EBRD Finance

Up to €5.35 million sovereign loan

Budget

Budget: €6 million

Technical Cooperation

It is envisaged that the technical cooperation support will provide assistance with the following:

1) Procurement and implementation support (est. €375,000); and
2) Financial and Operational Performance Improvement Programme (est. €200,000).

Deadline: 29 March 2013

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