OREANDA-NEWS. July 25, 2013. The European Bank for Reconstruction and Development (EBRD) is providing a sovereign loan equivalent to EUR 5.4 million to the Republic of Armenia, to be used to improve water supply for the 1.1 million inhabitants of Yerevan, the nation’s capital.

Yerevan Djur CJSC, the operator of the water infrastructure in the city, will implement the project and support upgrades to the Yerevan’s water network by improving supply and reducing water losses. The company is fully owned by Veolia Environnement S.A. of France, the world’s largest supplier of water services, which has operations in 66 countries and strong expertise in water and wastewater services.

The funds will be used to rehabilitate sections of the water distribution network that are in poor condition, replacing supply pipes. Yerevan Djur CJSC will also install new water meters for households. As well as reducing water losses, the investments will lower operational costs, while improving the reliability of tariff collection and of 24-hour supply in all targeted districts.

In addition to EBRD financing, the European Investment Bank (EIB) is considering a loan equivalent to EUR 5.4 million and the European Union (EU), through its Neighbourhood Investment Facility (NIF), will provide grant funds of EUR 5.5 million.

The preparation of the project has been supported by a EUR 200,000 pre-investment Technical Cooperation (TC) grant from the government of the Czech Republic. TC grant financing for project implementation will be provided by the EBRD Water Fund (EUR 200,000) and the ETC Fund (EUR 200,000).

“This project is important for the city of Yerevan. Reliable water supply is a fundamental need for households,” says Suma Chakrabarti, EBRD President, who signed the loan agreement in Yerevan.

The Bank has been active in Armenia since the country’s independence and has invested over €656 million across approximately 120 transactions. The rehabilitation of municipal infrastructure is one of the EBRD’s key priorities in Armenia. In 2012, the Bank signed 15 projects in the country worth a total of EUR 94 million.