Veolia Voda Capital Increase

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The EBRD is considering making an additional equity contribution to the share capital of Veolia Voda in an amount of up to EUR70 million. The equity contribution will be made through the issuance of new shares. The proceeds will be used by the Company to fund its development in the Bank’s countries of operation expanding the current scope of development focussed from 6 countries (including Russia and Ukraine) to all of the Bank’s countries of operation. The project will support the expansion of a leading strategic investor in water and wastewater services into markets that it is not present today (new countries). Furthermore, the client will expand into industrial water/wastewater treatment, demonstrating the benefits of outsourcing to specialist companies. Veolia Voda SA. Up to EUR70 million equity investment. Up to EUR70 million. Environmental classification and rationale The Project has been categorised B. In accordance with the Bank’s Environmental and Social Policy (2008), Projects where clients with multi-site operations are seeking general corporate funding through additional equity investment require a corporate environmental and social audit to assess the Company’s current environmental and social management systems against the Bank’s Performance Requirements (PRs). The Bank has an existing equity investment in the Company, and therefore the increase in the equity will not expose the Bank to any new environmental and social issues. Due diligence undertaken and outcomes Additional environmental and social due diligence (ESDD) has been undertaken to complement the Bank’s previous appraisal so as to assess the Company’s past and current performance against the Bank’s PRs. The ESDD has confirmed that the Company has a good environmental and social management system in place and the capacity to fully implement the Bank’s PRs. The Company has environmentally related objectives at its core as it is helping to improve the quality of drinking water and wastewater treatment through its operations. The Company has developed a comprehensive Environmental and Social Action Plan (ESAP) as part of the initial equity investment in 2006. This has been further reviewed as part of the current due diligence and updated as required to take account of the Bank’ PRs. In addition, the Company will implement environmental and social due diligence procedures agreed with the Bank to its potential new operations. The implementation of the current investment programme and the Environmental and Social Action Plan (ESAP) will enable to the Company to comply with National, EU and its corporate environmental standards and is structured in line with EU environmental standards. The implementation of the ESAP will significantly improve the company's environmental management and overall performance. The Company is developing a stakeholder engagement plan. This includes the requirement of publishing an annual corporate report for its CEE operations in 2010. Expected Implementation requirements None. Mr. Etienne Petit Veolia Voda SA Parizkska 11 110 00 Praha 1 Czech Republic