Montenegro Regional Water Supply Project

complete

The proposed project is for a regional water supply scheme that will provide potable water from Lake Skadar to the municipalities along the Montenegrin coast. The EBRD will finance the northern branch of the regional water supply system which will supply Budva, Tivat, Kotor and Herceg Novi. The World Bank will finance the southern branch supplying Bar and Ulcinj. The proposed project will contribute to the transition process by: commercialisation through introduction of commercial contracts between the Public Enterprise for Regional Water Supply “Regionalni vodovod Crnogorsko Primorje” and the local municipal water companies; tariff setting based on cost recovery principle; sector reform linked to KfW and USAID technical assistance programmes, which already have yielded significant results in improved collection rates, introduction of computerised billing and collection, and increased management awareness of commercial and financial matters. Public Enterprise for Regional Water Supply “Regionalni vodovod Crnogorsko Primorje”, a state enterprise established for the purpose of providing bulk water to the coastal municipalities in Montenegro. The EBRD is considering a loan of up to EUR 17.9 million. The World Bank will provide a parallel loan of 9 million, which is part of a larger multi-sector loan. EUR 51.7 million. The project has been screened B/1. This project presents significant environmental opportunities regarding improvement of drinking water supply to Montenegro coastal region, reducing the risk to public health and improving efficiency and reliability of the water supply for the tows of Budva, Tivat, Kotor and Herceg Novi. The environmental due diligence will assess the ability of the selected project to bring the facilities into compliance with applicable national and EU environmental standards. It will also review environmental issues associated with current potable water production and distribution, as well as wastewater collection and treatment facilities. ED is of an opinion that the available financing might not be sufficient to bring all the operations of the future Regional Water Company in compliance with EU standards. This refers to sewerage collection and its treatment. In support for the project, the TC funds are required for: assisting the Public Enterprise for Regional Water Supply “Regionalni vodovod Crnogorsko Primorje” to establish commercial water sales contracts with the local municipal water companies and project Implementation Support for Regional Water Supply “Regionalni vodovod Crnogorsko Primorje”