DE WATERGROEP - SUSTAINABLE WATER SUPPLY

The project concerns the extension and rehabilitation of the water supply network of De Watergroep, the largest drinking water company in Flanders, Belgium. This is part of the company's 2023-2028 investment programme.

The aim is to replace outdated water distribution infrastructure, upgrade the water supply network and enhance its water and energy efficiency. The investments will thus make the water supply more resilient to climate change and support climate change mitigation. Additionally, by improving the water supply services quality, efficiency and affordability, the investment will enhance the quality of life of the 3.3 million people living in the serviced area.

The project concerns part of the 2023-2028 investment programme in the drinking water production and distribution facilities of De Watergroep, the largest drinking water company in Flanders, Belgium. The service area of the Watergroep covers 177 municipalities in four of the five Flemish provinces (including Limburg, which is an EU Cohesion region).

The investments will rehabilitate and extend the water supply network and thus enhance its water and energy efficiency. The project aims at improving the quality, efficiency and affordability of the water supply services, thereby enhancing the quality of life of the 3.3 million population in the service area.

The project contributes to compliance with European and Flemish water regulations and environmental standards. The project will also contribute to mitigating market failures in the water supply sector by financing infrastructure that generates positive externalities, including avoided public health costs, environmental benefits of improved water quality, and enhanced mitigation and adaptation to the adverse impacts of climate change that are not fully reflected in the applicable water tariffs.

In view of the capital-intensive nature of De Watergroep's activities and the magnitude of the required debt financing, the Bank adds importantly to the depth of the available funding options, acting alongside other banks. The Bank is able to provide long-term financing, aligning maturities to the extended economic life of the investments.

The promoter will be required to implement and operate the investments in conformity with national laws, as well as the EIB's environmental and social standards. The project will support compliance with key EU directives in the water sector notably the Drinking Water Directive (2020/2184/EU) and the Water Framework Directive (2000/60/EC). The project is expected to contribute to climate action and environmental sustainability (CA&ES) objectives, in particular to climate mitigation and climate adaptation. Most of the components to be financed under the investment loan are expected to have limited environmental and social impacts. However, some of the investments may fall under Annex II of the Environmental Impact Assessment (EIA) Directive 2011/92/EU as amended by Directive 2014/52/EU, requiring the competent authorities to determine whether an EIA is required. Where a formal EIA is required, a copy of the Environmental & Social Impact Study or the Non-Technical Summary (NTS) or equivalent document will be provided to the Bank, and published on its website. The Promoter will also be required to verify that all of the schemes submitted for financing by the Bank follow the Birds Directive 2009/147/EC and Habitats Directive 92/43/EEC. For any part of the project that may impact on a nature conservation site, the promoter will be required to provide to the Bank information on the mitigating measures required to comply with the Habitats and Birds Directives. The promoter's capacity to ensure that the schemes are in compliance with the EIB's environmental and social standards will be verified at appraisal.

The EIB will require the promoter to ensure that implementation of the project will be done in accordance with the EIB's Guide to Procurement.