LINZ VERSORGUNGSINFRASTRUKTUR

The project will finance the rehabilitation of water and wastewater infrastructure and heat exchanger for district heating and district cooling in the City of Linz.

The project is an investment programme that comprises investment schemes in the promoter's district heating and cooling networks, water supply system, sewer network and the wastewater treatment plant. The programme's energy component includes two investments in district heat generation and cooling in Linz: - The first project component concerns the construction of two District Heating (DH) exhaust heat recovery units with heat pumps (35MW in total), in a waste incinerator and biomass power plant in Linz Mitte. - The second project component concerns the construction of district cooling centre FHKW Mitte (20MW), and expansion of the district cooling network (47 MW connection load), including the construction of a multi-utility tunnel. Both district heating and cooling systems will fulfil the criteria of efficient networks, as stipulated by the Energy Efficiency Directive. The water and wastewater part of the programme comprises four main components: - Water production: modernisation of wells, pumping stations and service reservoirs, - Water distribution: replacement and/or rehabilitation of transmission and distribution mains and house connections, - Wastewater collection: replacement and/or rehabilitation of sewers, - Wastewater treatment: modernisation of several components in the wastewater treatment plant.

The project contributes to natural resource efficiency and environmental protection, as well as to climate action throughout investments in the energy and water sectors. It is in line with the Bank's lending policies/orientation for these sectors and the European policy for the protection of the environment, in particular the objectives defined in the relevant Directives (Energy Efficiency, Renewable Energy, Water Framework, Urban Wastewater Treatment, etc.). The energy component contributes to maintaining or increasing security of supply and reduces carbon and air pollution externalities by enabling the integration of clean energy supply and increasing efficiency. The water component contributes to mitigating market failures in the sector by financing infrastructure which generates positive environmental and health externalities that are not fully internalised in water tariffs.

These outcomes would not be realised to the same extent without public intervention. The EIB's role as anchor investor is expected to attract additional investors, strengthen the utility's financial position, and diversify its funding sources. EIB support brings tangible financial value by lowering funding costs and offering longer tenors than typically available, and it is expected to accelerate its overall implementation. This is particularly relevant in today's volatile market environment.

For the water component, the project aims at maintaining compliance with the Urban Wastewater Treatment Directive (91/271/EEC), the Drinking Water Directive (2020/2184/EU), and the Water Framework Directive (2000/60/EC). For both the energy and water components, some schemes may fall under Annex II of the environmental impact assessment (EIA) Directive 2011/92/EU as amended by Directive 2014/52/EU, which requires the competent national authority to determine the need for an EIA. The exact requirements, as well as, where and if applicable, the requirements of Birds Directive 2009/147/EC and Habitats Directive 92/43/EEC, will be verified during appraisal. The schemes are expected to have limited environmental impact. The environmental and social due diligence will follow the programme lending approach according to the EIB's standards. It will focus on the promoter's capacity to implement the programme in line with the EIB's environmental and social standards and requirements.

The Bank will require the promoter to ensure that contracts for implementation of the project will be tendered in accordance with the applicable EU procurement legislation, Directive 2014/23/EU / 2014/24/EU / 2014/25/EU as well as Directive 92/13/EEC or Directive 89/665/EEC as interpreted by the Court of Justice of the EU, with publication of tender notices in the EU Official Journal, as and where required.