It said the transaction between the bank and the Belgrade Water Company would help increase the ‘operational efficiency’ of this public utility.

‘We are proud to support the improvement of Belgrade’s water supply and services and to be at the forefront of institutional reform in the municipal sector,’ said Matteo Patrone, EBRD director for Serbia.

The Mayor of Belgrade Siniša B. Mali added that the maintenance of a high-quality water supply was imperative for the city.

‘We commend the public utility company, Belgrade Waterworks and Sewerage, for its strategic efforts to develop better water infrastructure. The EBRD is a key partner in this sector.’

The EBRD said the loan would be released in two tranches of up to €8.5m and an uncommitted tranche of up to €4.5m.

The first tranche will be used to finance improvements in the water supply system. This will focus particularly on the construction of two new pipelines to distribute raw water from the Sava River to the Makis water treatment plant, the bank said.

Additionally, funds would also be used to aid the removal of sediment from Belgrade’s main water reservoir and the relining of a water pipeline to transfer raw water from water-collection wells to an existing treatment plant.

The second tranche – subject to a feasibility study and further due diligence – will be used to refurbish Belgrade’s main water-treatment plant, Makis I.

The bank noted that an extra €795,000 grant is being provided by the EBRD Shareholder Special Fund and Austria for this project.