BERLIN WATER AND CLIMATE ADAPTATION PROGRAMME

The project is part of the 2023 to 2027 investment programme of Berliner Wasserbetriebe (BWB), the public water company for Berlin and surrounding communities. The investments mainly consist of the extension and rehabilitation of water supply and wastewater collection and treatment facilities.

The aim is to contribute to mitigate market failures in the water sector by financing infrastructure that make a positive impact on the environment, public health and climate, not fully reflected in the current water and wastewater tariffs in the serviced area. More specifically, the project aims to: (i) adapt to climate change to ensure sufficient quantity and quality of water supply to BWB's customers (ii) increase the removal of nutrients and micro-pollutants from the wastewater effluent to improve the quality of the receiving surface water body (iii) meet the demands for water supply and wastewater disposal in the service area, thereby enhancing the quality of life of local population. The investments are also expected to increase the generation of renewable energy and improve water and energy efficiency.

The project concerns the 2023-2027 investment programme in water supply and wastewater collection and treatment of Berliner Wasserbetriebe (BWB), Germany's largest water utility. The service area of BWB covers the State of Berlin and localities in the neighbouring State of Brandenburg, and has a total population of around 4.4 million inhabitants. The investment programme mainly consists of the extension, upgrading and rehabilitation of water supply and wastewater collection and treatment facilities. The project aims to: (i) adapt to climate change to ensure sufficient quantity and quality of water supply to BWB's customers, (ii) increase the removal of nutrients and micro-pollutants from the wastewater effluent to improve the quality of the receiving surface water body and (iii) meet the demands for water supply and wastewater disposal in the service area, thereby enhancing the quality of life of the population in the service area. The investments are also expected to increase the generation of renewable energy and improve water and energy efficiency. The project will contribute to mitigating market failures in the water sector by financing infrastructure that generates positive environmental, public health and climate externalities that are not fully reflected in the applicable water and wastewater tariffs in the service area.

The Bank's loans have been a cornerstone of the borrower's substantial long-term investment programme into its water and wastewater systems, providing a substantial contribution to the programme's financeability and affordability. The loan will offer key benefits such as a very long loan maturity and flexibility with respect to drawdowns, interest rate arrangements and grace periods, which will enable the required alignment with the implementation and financial modalities of the project.

By contributing to sustainable water and wastewater management, the programme will make an overall positive environmental impact, in line with BWB's 2002 sustainability strategy to further contribute to a more sustainable and climate resilient Berlin. The project supports compliance with the EU Water Framework Directive (2000/60/EC), Drinking Water Directive (2020/2184/EU 98/83/EC), the Urban Wastewater Directive (91/271/EEC) and EU and national environmental legislation. It will contribute to climate action and environmental sustainability (CA&ES) objectives, in particular, among others, to climate mitigation and adaptation, sustainable use and protection of water resources and pollution prevention and control, by increasing water and energy efficiency, reducing storm water overflows emissions and improving wastewater treatment. Some investments may entail limited environmental and social impacts, therefore these 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 EIB, and published on its website. BWB will be required to verify that all of the schemes submitted for EIB financing are in line with the Birds Directive 2009/147/EC and Habitats Directive 92/43/EEC. Should any part of the project bring a negative impact on a nature conservation site, BWB will have to inform EIB about the mitigating measures required to comply with the Habitats and Birds Directives.

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

This will be the sixth operation of BWB financed by the EIB since 1994.