Residents and tourists along Bulgaria’s Black Sea coast should benefit from a €11mn loan from the EBRD to the state-owned Burgas Water Company to help expand and improve its infrastructure.


It is the first loan by the bank to a regional water company outside of Sofia and around five similar projects in regions across Bulgaria are planned. It is also the EBRD’s first project co-financed with the European Union in the water sector in the country, which is expected to provide a grant of €20mn under its ISPA programme.


Burgas, a city on Bulgaria’s east coast which is attracting a growing number of tourists, has for years suffered from a lack of investment in municipal infrastructure. The bank’s loan will help improve water and waste-water infrastructure, benefiting the 426,000 year-round inhabitants – and 1.2mn in summer months – it provides water and sewerage services for. The EBRD and EU investment will also help Burgas and the Black Sea region meet European environmental standards.


Henry Russell, EBRD deputy director for municipal environmental infrastructure, says this project is possible because of recent reforms implemented by the authorities. The government adopted a strategy to enable loans directly to local water companies without sovereign guarantees, and the recent introduction of an independent water regulator should improve the creditworthiness of regional water companies. These initiatives will improve standards at local municipalities benefiting local residents, Russell adds.


The EBRD is setting conditions on the loan that will enable the water company to become more dynamic and commercially oriented, while other conditions include further improving legislation and regulatory reform that can assist further investment in the sector.


To help support project preparation, significant technical cooperation funds were provided by the Italian government and the Central European Initiative. Further funds are expected from the Canadian International Development Agency to support institutional building at both the company and the city.


Valentin Tserovski, minister of regional development and public works, says: “This is a very important infrastructure project worth €
32mn, and it shows very good cooperation between the EBRD, EU and the Burgas water company, which is providing €
1mn towards the project. We hope the company will propose a good investment programme to the independent water regulator, a programme which should be the basis for future market-oriented behaviour of the company.”


The EBRD is the largest investor in central and eastern Europe and the Commonwealth of Independent States. In the municipal sector alone, the bank has invested more than €
1.6bn in 20 countries. The bank is also the largest investor in Bulgaria, having invested more than €
1bn in 53 projects.