OREANDA-NEWS. The European Bank for Reconstruction and Development (EBRD) is improving the living standards of almost 500,000 inhabitants of the Egyptian towns of Motobas, Desouk and Burullus with a EUR 55 million loan for the expansion of wastewater treatment in the northern governorate of Kafr el-Sheikh.

The funding will support the construction of two new wastewater plants, the expansion of three existing plants and the installation of 700 km of pipes and 52 pumping stations.

The total cost of the investment programme is EUR 164 million. In addition to the EBRD financing, the European Investment Bank is providing a loan of EUR 77 million and the EU Neighbourhood Investment Facility (NIF) is making a grant of EUR 32 million.

Egypt's sewage infrastructure serves only 40 per cent of the country's population. In addition, access to sanitation is distributed unevenly: While 90 per cent of the existing sanitation network covers urban areas, rural areas remain underserved and are facing significant environmental threats and health risks.

Expanding the wastewater treatment facilities in Kafr el-Sheikh will substantially reduce the level of pollution from untreated domestic wastewater and thereby the contamination of surface and ground water. The investment will also benefit Lake Burullus, the main fishing lake in Egypt, and the Mediterranean Sea by protecting them from polluted wastewater.

Treating wastewater will also help improving the health of the local population by decreasing the incidence of water borne diseases. An additional awareness programme will focus on disseminating better hygienic practices.

Hildegard Gacek, EBRD Managing Director for the Southern and Eastern Mediterranean region, said: "This project is a milestone in our activities in Egypt: not only because of the significant size of the EBRD loan, but also because of the impact the investment will have on the local population and the environment. Finally, intensive technical cooperation will demonstrate what the EBRD and its partners can deliver in a joint effort."

The Kafr el-Sheikh Water and Sanitation Company, the recipient of the funding, is the sole provider of piped drinking water and wastewater services in the Kafr el-Sheikh governorate. The project and associated technical cooperation will contribute to the reform of the wider sector aimed at commercialising existing utilities under the umbrella of the state-owned Egyptian Holding Company for Water and Wastewater.

Since the beginning of the EBRD's operation in Egypt in 2012, the Bank has committed over EUR 675 million to 21 projects across a wide range of sectors. The Bank has also facilitated direct technical assistance through its Small Business Support programme, which to date has benefited approximately 185 Egyptian small and medium-sized enterprises.

In the southern and eastern Mediterranean region, to date the EBRD has invested over EUR 1.5 billion across 59 projects.