|
EBRD supports private sector participation in municipal services in central and eastern Europe
To encourage private sector involvement in the provision and financing of environmental services and infrastructure in central and eastern Europe, the European Bank for Reconstruction and Development (EBRD) has signed a US$ 100 million (ECU 88 million) multi-project facility (MPF) with Compagnie Générale des Eaux (CGE) of France.
"This agreement combines the EBRD's special emphasis on promotion of the private sector with its commitment to support decentralised and efficient municipal services as a key ingredient of the transition process," said the EBRD's President, Jacques de Larosière. "Building on its expertise in the municipal sector, the EBRD can assume specific regulatory and municipal risks, which is the MPF's key appeal to private companies."
"Private sector involvement in environmental services means improved efficiency and service quality for the customer," said Jean-Marie Messier, President of Compagnie Générale des Eaux. "The potential in these countries for private sector management of public sector infrastructure is huge. The MPF is an innovative instrument ideally suited to our strategy and to the specific nature of this business. The EBRD's participation will provide comfort in respect of the political and municipal risks associated with concession financing."
The MPF agreement is with CGE and those of its subsidiaries active in the municipal environmental services sector in the region. EBRD financing will be provided to existing or new special-purpose companies, in which CGE and its subsidiaries hold management control. These project companies will operate and invest in municipal service and infrastructure systems under Build-Operate-Transfer (BOT), lease or concession contracts. The MPF will support projects that will address urgent investment needs, improve efficiency in environmental services and which would otherwise be too small for EBRD financing.
The first project under the MPF framework agreement was also signed today. An engineered landfill, meeting European Union standards, will be constructed and operated in Banska Bystrica, Slovak Republic. The concession agreement is with a project company controlled by CGEA, CGE's subsidiary which specialises in waste management and transport. The EBRD will provide DM 2 million to the project company.
Compagnie Générale des Eaux, one of the world's leading utilities groups, is also active in the construction, property and communication sectors. In addition to CGE itself, four subsidiaries of CGE, all leaders in environmental services, are to develop operations under this MPF: Compagnie Générale d'Entreprises Automobiles (CGEA) in waste management, Compagnie Générale de Chauffe (CGC) in energy, Omnium Technique de Valorisation (OTV), and SADE-CGTH in water and waste water.
Starting its expansion into international markets in the 1970s, CGE now operates in more than 80 countries and employs over 220,000 staff. In 1996, the CGE group had consolidated revenues of US$ 29 billion, 30 per cent of which were generated outside France.
Two other MPFs in this sector have been signed by the EBRD.
|
