YEREVAN, July 19. / ARKA /. The European Bank for Reconstruction and Development (EBRD) is lending €6.5 million as a sovereign loan to the Republic of Armenia to improve water supply and wastewater services in 17 municipalities across Armenia, EBRD said today in a statement.

The funds will be on-lent to the state-owned Armenian Water and Sewerage Company (AWSC) to finance the rehabilitation of water and wastewater networks. In addition, the company will complete the construction of two wastewater treatment plants.

The project will significantly reduce water leakages and improve drinking water availability for approximately 300,000 residents. In addition to the EBRD’s funding, the European Union Neighbourhood Investment Facility will provide a €7 million grant to implement further capital investments.

The project will further receive up to €2 million in technical cooperation grants from several donors. The Canadian Government has contributed €200,000 to assist AWSC in preparing an investment programme. The remaining grant funds are contributed from the EBRD’s Neighborhood Investment Facility, the Shareholders’ Special Fund and the ETC Fund.

These funds will be used to assist AWSC with the development of a program for commercialization and organizational improvements of the company, as well as to support the implementation of the investment programme.

This will be the EBRD’s second project in the Armenian water sector. Since the beginning of its operations in Armenia in 1992, the EBRD has invested over €400 million in 100 projects in the country’s financial, corporate and energy sectors, and infrastructure, with 96 per cent of the projects’ being investments into the development of the private sector.

The Armenian Water and Sewerage Company has been managed by French Saur since 02004. The agreement with it was prolonged in 2010 and is supposed to be prolonged again until 2013. The company services 37 cities and 268 rural communities in 10 regions of Armenia.

The Armenian Water and Sewerage Company says it has invested$100 million in 2004-2011 to improve water supplies and plans to invest as much in the next five years.-0-