Working in Russia

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Stream 3 Infrastructure for entrepreneurship
Roundtable Urban infrastructure development in
CEI countries success stories and best
practices in municipal projects
Hotel Devin Thursday, 24 November 09.00-10.30
Coordinator CEI
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Raffaele BOLDRACCHI Central European
Initiative - CEI Summit Economic Forum
Bratislava 24/11/2005
The role of the Donors in supporting the EBRDs
Municipal Infrastructure Investments
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Contents of the presentation

• 1. The EBRD and its Official Co-financing Unit
• 2. Helping Municipalities to meet infrastructures
  needs
• 4. Donors role in supporting MEI
• 5. Lessons learned
• 6. Future developments
• 7. TC Assignments and Procurements activities
  under tendering.

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The EBRD

• International financial institution, promotes
  transition to market economies in 27 countries
  from central Europe to central Asia
• Owned by 60 countries and two inter-governmental
  institutions
• Capital base of 20 billion

Cumulative commitments 28.4 bl. Total project
cost 88.5 bl.
Unaudited September 2005
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The Official Co-financing Unit (OCU)

• funding of Technical Cooperation (TC) projects to
  facilitate Banks investment projects through the
  EBRD TC Fund 1.1 billion.
• co-financing Bank investment operations through
  the Official co-financing 9.7 billion.

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Helping municipalities to meet their
infrastructure needs

• Structuring the financing of municipal
  infrastructure, equipment and services
• Promote commercialisation and corporatisation of
  services
• Development of regulatory structures
• Promotion of appropriate private sector
  involvement
• Environmental improvement
• Facilitate EU grant and commercial loan
  co-financing

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EBRDs objective Greater efficiency and higher
quality in the provision of local authority
services.

• 1.9 billion committed to 5 billion in
  investment
• Projects in over 120 municipalities
• Over 30 million population served by
  EBRD-financed municipal projects
• Trend towards non-sovereign and private financing
• 37 Sovereign
• 40 Private
• 23 Municipal

EBRDs municipal projects have had a successful
track record since 1996
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MEI Sectors
MEI Regions
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Donors role in supporting Municipalities
investments

• Assists in developing municipal creditworthiness
  and improving budgetary and fiscal practice
• Support in project appraisal and transaction
  structuring
• Providing co-financing

Reduced risk reduces Citys cost of borrowing in
the medium term
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The Donors technical cooperation
Focus on investment projects (73.1 million
committed) 70 of commitments project
implementation or preparation
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The Key Donors
28
43
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5
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Examples of TC Donor funding

• Netherlands Croatia Small municipalities Grant
  Fund - 2.5 m.
• Austria Municipal Infrastructure Fund - 0.5 m.
• Italy Private Sector Development in W. Balkans
  - 4.0 m.
• EC Municipal Investment Support Programme -
  1.5 m.
• EC Municipal Finance Facility (TC) - 21 m.
• EC Municipal Finance Facility (CF) - 9.0 m.

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The EU/EBRD Municipal Finance facility

• To develop and stimulate commercial bank lending
  to small and medium-sized municipalities in the
  new EU State Members and Romania and Bulgaria.
• The EBRD approved the Municipal Finance Facility
  for a total amount of EUR 100 million with EU
  PHARE Grant support of EUR 15 million.
• The Facility works through Partner Banks
  (commercial banks) and provides finance in the
  form of credit lines and risk sharing.
• The main objectives are to encourage expansion of
  financing to municipalities with less than
  100,000 inhabitants (or 150,000 in case of
  Romania and Bulgaria) for infrastructure
  investments.
• In 2004, the EBRD signed 3 projects for a total
  amount of EUR 38 million of which 2 projects were
  risk sharing facilities in Poland and Slovakia
  and one was a credit line in Romania.

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The Donors Official co-financing in support of
MEI investments (1,588 million)
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EBRD helps mobilise EU ISPA (Instrument for
Structural policies for Pre-Accession)
co-financing
Co-operation with ISPA
EBRD-ISPA Track Record

• Memorandum of Understanding between EBRD and ISPA
  signed in April 2000
• EBRD project appraisal consistent with ISPA
  evaluation process
• Co-operation in organising technical assistance
• Assistance to municipalities in preparation of
  applications to ISPA for co-financed projects
• Agreement on procurement requirements

• Approximately 400 million in EBRD-ISPA
  co-financing
• Total project value of almost 1.3 billion
• Over 650 million of projects in pipeline
• Projects in Czech Republic, Estonia, Lithuania,
  Poland, Romania, etc.

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Municipal Environmental Loan Facility (MELF) in
Romania with the EU-ISPA Programme

• To provide co-financing to EU-ISPA funded
  investments in the water, waste-water and solid
  waste management sectors, in several
  municipalities.
• Individual sub-projects to receive 50-75 grant
  funding from EU-ISPA and EBRD co-financing will
  range between 25-50 from the total cost of the
  sub-projects.
• By the end of 2004, the MELF has approved nine
  projects in Constanta, Iaisi, Arad,Brasov, Targu
  Mures, Bacau, Timisoara, Sibiu and Oradea. The
  total projects cost is 393.9 million, and the
  EU-ISPA Programme has contributed with 298.7
  million.

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Key Lessons learned

• Strong stakeholder support is crucial
• Utilise financing structure appropriate to a
  particular market
• Focus on co-financing early in the project cycle
• TC support critical for both preparation and
  timely implementation
• Transition

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Future developments

• Replication of water sectors approach into other
  MEI sector (e.g. urban transport, solid waste,
  district heating).
• Expansion of local authorities access to capital
  Sub-sovereign guarantee is the key tool)
• Continued presence in ATC and extensive
  co-financing with commercial banks and EU Funds
• Continued presence in ITC of W. Balkans and
  Russia
• Focus on ETC Countries Grant co-financing
  required

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TC assignments in preparation

• St. Petersburg District Heating Reform EU
  Funded
• Zagreb Solid Waste Management Project
  Transaction Adviser EBRD funded
• Burgas Water and Wastewater project Burgas Water
  Company FOPIP Austria funded
• Karlovac Wastewater Management - FOPIP Italy
  funded
• Harkiv Wastewater Treatment Commercial due
  diligence IFRS Audit EBRD TC Fund
• Subotica wastewater Treatment Plant PME Italy
  funded

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Procurement of goods, works

• Gdansk Water infrastructure Company project
  EBRD/EU Cohesion fund Works Open procurement
• Tajikistan Kudjan Water Supply Improvement
  Project EBRD Works goods open procurement
• Karlovac Wastewater management EBRD/EU ISPA
  Services, Goods, Works Open procurement
• FYR of Macedonia - Municipal and Environmental
  Programme EBRD - Works Open procurement
• Syktyvkar Municipal Water Services development
  Installation, Works and Goods EBRD/NDEP Open
  procurement

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Thanks for your attention

• boldracr_at_ebrd.com
• www.ebrd.com

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Stream 3 Infrastructure for entrepreneurship
Roundtable Urban infrastructure development in
CEI countries success stories and best
practices in municipal projects
Hotel Devin Thursday, 24 November 09.00-10.30
Coordinator CEI