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EBRD to help Lithuanian water company
The inhabitants of the second-largest city in Lithuania, Kaunas, will see their living conditions and their environment substantially improved as a result of a loan from the European Bank for Reconstruction and Development (EBRD) signed today in Kaunas. The loan of US$ 14.948 million (ECU 11.5 million) will go to Kaunas Water Company (KW), a special status closed joint-stock company organised under Lithuanian law.
Ron Freeman, First Vice President of the EBRD, said: “The EBRD has played a major role in the preparation of the Baltic Sea Action Programme in order to ensure the ecological restoration of the Baltic Sea and the preservation of the ecological balance. As well as benefiting the environment, this project will improve the reliability of water supply to domestic consumers and industry, which for certain industries represents a precondition for development”.
The objectives of the project are not only to improve the quality of water and waste-water services in Kaunas, but also to enhance the operational and financial performance of KW through corporatisation, improved management and increased cost recovery. In addition, it will develop KW into a more self-financing and self-managing enterprise and pave the way for future private sector involvement. Another objective is to introduce water conservation through more cost-based tariffs, increased metering, and water leakage and wastage reduction programmes.
The total size of the project is US$ 100 million. A major share of the financing is provided by the Lithuanian central government. The project is also financed by the Swedish International Development Cooperation Agency (SIDA), the Nordic Environment Finance Corporation (NEFCO), the Finnish Government and EU-PHARE.
KW is 100 per cent owned by the city of Kaunas and is responsible for the provision of water and waste-water services in the city as well as collection of tariffs and billing to industrial and commercial consumers. The city has no waste-water treatment and discharges from Kaunas constitute around 90 per cent of the collected untreated waste-water in the entire country. Consequently, it was recognised as the top priority environmental hot spot in the Baltic Sea region. Five of the 47 environmental priority hot spots in the Baltic Sea catchment area are in Lithuania.
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