Discussions and preparations for cooperation with the European Investment Bank (EIB) started in mid-2006, through meetings between the representatives of EIB and the Federal Ministry of Finance (FMF), while the Federal Ministry of Agriculture, Water Management and Forestry (FMoAWMF) got actively involved in May 2007, when the EIB financial experts carried out an assessment in BiH and submitted their financial proposal for approval to the EIB Management Board. The Ministry of Finance and Treasury of BiH (MFT BiH) was informed that a loan arrangement in the amount of EUR 60 million was proposed, i.e. that the EIB proposed to finance the Project with EUR 121.3 million of total investment costs. Apart from investment in construction of facilities and procurement of equipment and proper technologies, this amount is expected to include financing of project documentation development, implementation of efficiency measures, project management, so as technical and price contingencies.
Finance Contract was initialled in March 2008 by the EIB and BiH representatives and thereafter signed in two steps. The Contract was firstly signed by the representatives of Bosnia and Herzegovina (MFT BiH) and the Federation of BiH (FMF and FMoAWMF), in Sarajevo on 15 July 2008, and then it was signed by the EIB representatives in Luxembourg, on 18 August 2008. Pursuant to the Contract, the Federation of BiH undertakes to implement the Project consisting of investment municipal schemes to be carried out by the municipalities from FBiH included in the Project, through the FMoAWF and FMF, using the loan funds in the amount of EUR 60 million and the equal amount of municipal contribution funds, which according to the Contract totals 121.3 million EUR. Financing of the Project is secured with the Guarantee Agreement, entered into force on 29 August 2007, by and between the European Community and the Bank, pursuant to Article 8 of the Council Decision 2006/1016/EC of 19 December 2006.
Purpose of the Project is to use available financial resources (EIB Loan, grants and municipal funds) for ensuring the implementation of measures contributing to the improvement of infrastructure and provision of services aimed at the adequate (both in terms of quality and quantity) water supply and waste water treatment in the municipalities included in the project.
In a nutshell, the Project aims at development of sustainable water and sanitation services (waste water collection and treatment) in the Federation of BiH, through construction of necessary facilities, development of adequate infrastructure of the sector and strengthening of municipal operators - public utility companies (PU).