EBRD to decide on 32.5 million euro investment

  • 2000-08-03
  • Aleksei Gynter
TALLINN - The board of directors of the European Bank for Reconstruction and Development will decide on Sept. 5 about lending 22.5 million euros ($67 million) to water company AS Tallinna Vesi and investing 10 million euros in owners' equity.

AS Tallinna Vesi is a vital part of the infrastructure of Tallinn. Its core businesses are supplying water, sewage disposal, rainwater drainage and wastewater treatment.

"The board will consider the loan, and AS Tallinna Vesi has a good chance to get it," said Jeff Hiday, EBRD spokesman.

According to AS Tallinna Vesi annual report, the process of privatization of the company is going to be completed in 2000, and 50.4 percent of the shares will be sold to a strategic investor.

Of the 22.5 million euro loan given previously by EBRD, 15.5 million will go toward refinancing.

"The rest of the loan, 7 million euros, will be spent on improving the financial condition of the company before the privatization; namely, to improve the wastewater treatment," Hiday said.

AS Tallinna Vesi paid 1.9 millions kroons ($115,000) as a compensation for the pollutants discharged in the sea in 1999, according to the annual report. EBRD now wishes to replace the state guaranteed loan with a longer-term corporate loan to make the water utility more attractive for potential buyers.

The last project realized through help of an EBRD loan was the reconstruction of the Vaskjala hydro junction, completed in 1999. EBRD has invested 348 million kroons in AS Tallinna Vesi from 1996 to 1999.

Tallinn Water PR manager Roland Aas said that according to the investment plan, the company would invest 275.1 million kroons in the water economy of Tallinn, 68 percent of which will be financed by the funds obtained from the increase of the share capital.

"As to investing 10 million, it's a preliminary information. The investment in AS Tallinna Vesi will be cleared after the first round of privatization," Hiday said. "In general, EBRD sees the Baltic states as a growing region and would like to continue and accelerate investments here. Two main areas of investments would be infrastructure and financial sector of economics," he added.