The funds will finance the construction of a biological sewage treatment facility, the development of Kaunas' water supply and a drainage system network.
About 9.5 million euros will be allotted to the installation of a biological sewage treatment system and the development of the water supply network, while the rest will go to the construction of an iron removal system at Petrasiunai.
The EBRD loan will cover half of the iron removal system project. Kauno Vandenys expects to obtain the remaining 5.13 million euros from elsewhere abroad.
Thomas Maier, the EBRD's director, said it was the first case in Lithuania when a loan had been granted directly to a company without first securing a state guarantee.
Vilius Burokas, the managing director of Kauno Vandenys, said that the sewage treatment system in Kaunas, which has been operating since 1999, has reduced pollution in the strip from the Nemunas River to the Curonian Lagoon by 70 percent.
Following the installation of the biological sewage treatment system, water pollution will be reduced by 95 percent and comply with EU standards, according to the company.
Kauno Vandenys expects to receive a subsidy of 15.96 million euros from the EU's ISPA fund and a grant of 6.38 million euros from the Lithuanian government.
The construction of the biological sewage treatment system, the water supply and the drainage system will start next year and is scheduled to be completed in 2005.
Installation of the iron removal system at Petrasiunai will start in about two years.