OREANDA-NEWS. December 02, 2008. The EBRD is contributing to the rehabilitation and renewal of the water supply services in the Georgian city of Borjomi with a sovereign loan of up to EUR1.5 million, reported the press-centre of EBRD.

The funding will be part of a package of more than EUR 9 million which also includes the Millennium Challenge Georgia Fund, the European Union and technical co-oporation grants from the Swedish International Development Co-oporation Agency and the EBRD’s Early Transition Countries Fund.

Under the project the water system in Borjomi will undergo a complete overhaul. A new water treatment plant and a new main from the plant to the reservoirs will be built, the water supply network will be rehabilitated and new reservoirs will be added to the system to guarantee best quality of the supplied water.

Borjomi is located in the south-west of Georgia, approximately 150 kilometres away from the capital Tbilisi. It has about 30,000 inhabitants and is a major ski resort in the region. The Georgian government is investing in the region’s tourism industry and infrastructure to tap its potential for year-round tourism.

The quality of water supply is one of Georgia’s most pressing concerns. The steady supply of clean water is a precondition for other rehabilitation projects. The financial package for Borjomi represents a tailor-made approach which combines loan financing with donor grant finance and technical cooperation to safeguard the projects’ success.

The EBRD is the single largest investor in Georgia and has already successfully participated in the renewal of the water supply systems in the cities of Kutaisi, Poti and Kobuleti. As in these previous projects, the Bank is extending its loan to the government of Georgia, which is on-lending the funds to the municipal water company Borjomis Tskalsaden-Kanalizatsiis Meurneoba Ltd.

Jean-Patrick Marquet, EBRD Director Municipal and Environmental Infrastructure, said the Bank “does not only bring funds to the project, but also valuable expertise which will help improve the operation of the water network and the quality of supply. The EBRD is delighted to work on this project with a number of strong partners who will all guarantee that residents and visitors will benefit from its implementation.”

The EBRD has invested some EUR 400 million in Georgia in recent years in all major sectors of the economy. The country is part of the Early Transition Countries Initiative, launched in April 2004, which uses a streamlined approach to financing to mobilise more investment and encourage economic reform.