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Austrian sponsors sign Multi-Project Facility with EBRD
An ATS 700 million (ECU 51.9 million) Multi-Project Facility (MPF) was signed last week by the European Bank for Reconstruction and Development (EBRD) and three Austrian urban service companies, VA Technologie AG, Steirische Wasserkraft-und Elektrizitäts-AG (STEWEAG) and Saubermacher AG, to provide municipal and environmental services in central and eastern Europe. The Austrian Finanzierungsgarantie-Gesellschaft GmbH (FGG) is providing financial back-up.
"This is the EBRD's second framework agreement for a municipal services MPF and brings together three companies which are otherwise unrelated," said Johan Bastin, Director of the EBRD's Municipal and Environmental Infrastructure team. "Private sector involvement in the provision and financing of municipal and environmental services brings important benefits to consumers, especially increased efficiency, cost savings, better service and improved environmental conditions. The MPF will help finance a number of relatively small investments."
Winfried Braumann, Managing Director of FGG, commented: "Huge demand in this sector has created many opportunities for economically feasible and ecologically sensible projects. This MPF has been especially tailored by the EBRD to accommodate Austrian companies, enabling them to benefit from EBRD co-investments for the first time. FGG's involvement, through its East-West Fund, provides added risk protection and therefore enables mid-sized companies to participate in the MPF as well."
The EBRD facility, which allows for both loan and equity participation, is part of an ATS 2 billion investment programme to fund 10-15 municipal service investment projects with strong environmental benefits. Proceeds from the EBRD facility will be channelled to project companies controlled by the three Austrian sponsors, who are responsible for preparing, financing and operating the selected investment projects in municipal service and infrastructure systems.
FGG will assist in the appraisal of each investment project, which will cover such services as water supply, waste-water treatment, municipal and industrial waste collection and disposal, district heating and natural gas distribution. The project companies, to be located in a number of municipalities, will be contracted under Build-Operate-Transfer arrangements, lease, concession or development management contracts.
VA Technologie AG is Austria's largest publicly listed engineering group, active in the metallurgical engineering and energy, environmental and municipal services sectors. Ten per cent of its sales originate in central and eastern Europe.
STEWEAG AG is currently state-owned and the biggest supplier of energy and urban heating in the Austrian state of Styria, with operations in the Slovak Republic and Slovenia. It will shortly be signing the first project under the MPF framework agreement, in which the EBRD is expected to provide an ATS 37 million (ECU 2.7 million) loan and ATS 7 million (ECU 519,000) equity investment to improve efficiency and achieve cost savings in district heating services in five municipalities in the Slovak Republic. The project involves total investment of ATS 150 million (ECU 11.1 million).
Saubermacher AG is a municipal and industrial waste collection, treatment and disposal company. Since 1990, it has expanded eastward by entering into joint ventures with municipal and private companies in Albania, Croatia, Hungary, the Czech Republic, the Slovak Republic and Slovenia. It currently operates municipal and industrial waste management services in various municipalities in these countries.
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