EBRD / SUBOTICA WATER UPGRADE

Project Description

The EBRD is considering providing a loan of up to €11 million to the City of Subotica, located in north Serbia, to support the modernisation of wastewater and water supply infrastructure in the city. The loan proceeds will be used to finance the construction of collector II, a second water treatment plant and a main water distribution aqueduct in the City, which will complete the  wastewater and water supply networks in Subotica.

Transition Impact

There are three key transition impacts in reforming public policies and practices in this project:

- at the Government level: the Bank will work closely with the Ministry of Economy and Regional Development and the Ministry of
  Environment and Spatial Planning in drafting the Public Utility Companies Reform Strategy to ensure that the EBRD standards and
  practices are reflected in the Strategy.
- at the City level: the City expressed its interest to explore the possibility of:

A) introducing incentive-based management contracts with the management of the 17 city-owned public utility companies and agencies
    (including the water company, district heating company, open markets company, city tourist organisation, city construction agency, etc.)
    which will lead to the adoption of market standards and professionalization of the public sector and underpinning the independence of
    company directors following the relevant legal changes;

B) introduction of targeted subsidised communal services by identifying vulnerable social groups and providing subsidies directly to them,
     instead of subsidising public utility companies in general.

- Public Utility Company “Waterworks and Sewerage Subotica” (“the Company”) will join the performance benchmarking exercise for water
  utility companies. Such performance benchmarking exercise is presently being organized by the Romanian Water Association. By joining
  this initiative, the Company will be able to compare its performance and results with a number of companies which operate in the
  Pannonian (or Carpathian) Basin and get insight into the operating standards and corporate governance of Public Utility Companies from
  neighbouring countries.


EBRD Finance

€11 million sovereign guaranteed loan to the City of Subotica to be on-lent under a Subsidiary Loan Agreement to the Public Utility Company “Waterworks and Sewerage Subotica”.

Budget

Total project costs are estimated at €20.9 million.

Deadline: 24 April 2013


For more info click here