WTE Süd-West of the Russian Federation

MIGA issued guarantees of €45.1 million ($51.7 million) and €22,500 ($25,816) to WTE Wassertechnik GmbH of Germany (WTE), a member firm of the Austrian EVN Group, for its €47.4 million shareholder loan to, and its €25,000 equity investment in, WTE Süd-West of the Russian Federation (WTESW). Both guarantees cover a period of fifteen years and provide coverage against expropriation and breach of contract.

The project addresses the increase in demand for water supply faced by the growing city of Moscow. The project consists of the construction of a green-field water treatment plant that will increase the Moscow’s potable water supply capacity by 4 percent. The project enterprise will be responsible for the construction (starting September 2003) of a 250,000 cubic meters per day water treatment plant under a thirteen and a half year build, own, operate and transfer (BOOT) concession scheme. Water will be channeled from the Moskva River to a processing plant where it will be filtrated using state-of-the-art tech-nologies. The purified product will then be distributed through the municipal water system by Mosvodokanal, the city-owned utility.

In addition to tax revenues, employment and training local management and employees, the project enterprise expects to transfer operating know-how to Mosvodokanal employees before the transfer of ownership at the end of the concession period. Moreoever, the plant’s clean water will improve local health, environmental, and safety conditions, and will help create positive business externalities.