South-West Moscow drinking water plant

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In December 2003, the local government of Moscow, Russia, through its water operator Mosvodokanal, awarded a 13.5 year build, own, operate and transfer (BOOT) contract for a potable water plant in South-West Moscow to German WTE Wassertechnik GmbH (WTE). WTE became responsible for the design, financing, construction and operation of the water treatment plant. The plant was expected to cost Euro 190 million (US$ 220.78 million) and was designed to produce 250,000 cubic meters of water per day. The plant would supply drinking water to one million people. WTE Wassertechnik GmbH became part of the Austrian group EVN AG in October 2003. Construction of the plant started in September 2003. WTE chose French Degremont, water treatment unit of utilities conglomerate Suez, for the construction of the ultrafiltration unit at the South-West Moscow drinking water plant in June 2004. The plant was expected to start operations by 2007. Ten years after completion, the ownership of the plant was expected to be transferred to Moscow municipality-owned water utility, Mosvodokanal. In 2005 MIGA issued a guarantee of Euro 42.7 million ($56.4 million) to WTE Wassertechnik GmbH of Germany (WTE) for its Euro 47.5 million equity investment in WTE Sud-West of the Russian Federation. The guarantee spanned a period of 13 years and provided coverage against the risks of expropriation and breach of contract. The guaranteed replaced a 2004 shareholder loan and equity guarantee.